IIFL Finance, a diversified financial services company, on Thursday unveiled a plan to raise debt capital worth ₹5,000 crore by issuing bonds on a private placement basis. The Mumbai-based company will issue secured redeemable non-convertible debentures (NCDs) with the shelf limit of ₹5,000 crore, subject to regulatory and statutory approvals.
“The board of directors of the company at their meeting held today, i.e. June 23, 2022, approved the raising of funds by way of issuance of Secured Redeemable Non-Convertible Debentures with the shelf limit of ₹5,000, in one or more tranches, through public issue, subject to regulatory and statutory approvals, as applicable,” IIFL Finance says in a filing to the BSE.
The announcement came two-week after Middle East-based sovereign wealth fund ADIA (Abu Dhabi Investment Authority) proposed to invest ₹2,200 crore for a 20% stake in IIFL Home Finance, a wholly-owned subsidiary of IIFL Finance. This is touted to be one of the largest equity investments in the affordable housing finance segment in India by a financial investor, as per the company. The home finance company plans to use the additional capital to continue its granular expansion strategy into new markets to address the significant and growing demand for housing loans.
IIFL Home Finance is a wholly-owned subsidiary of India Infoline Finance and is registered with National Housing Bank (NHB) as a housing finance company (HFC). The company primarily offers low ticket home loans, LAP and corporate mortgage loans (lower ticket developer funding). As on December 31, 2021, IIFL Home had an AUM of ₹22,207 crore, largely toward home loans (74%), followed by loan against property (LAP) (24%) and construction finance (2%). It had networth of ₹2,581 crore. Tier-I and overall CAR stood at 22.1% and 31.7%, respectively. Networth coverage for net NPAs was around 12 times.
Following the announcement, IIFL Finance shares opened a tad lower at ₹311, in sync with the broader market, against Friday’s closing price of ₹314.45 on the BSE. The stock soon reversed losses and gained 3.3% to hit an intraday high of ₹325 apiece, before closing at ₹319.30, up 1.54%. The market capitalisation of the midcap stock stood at ₹12,125.1 crore.