IIFL Finance Set to Bolster Capital with ₹6 Billion Private Placement NCD Issue

Image Source: The Economic Times

In a strategic move to strengthen its capital base and support business growth, IIFL Finance Limited has announced plans to raise funds through the issuance of non-convertible debentures (NCDs) on a private placement basis. The company is targeting an aggregate of up to ₹6 billion (600 crore) in this latest fundraising effort, marking a significant step in its ongoing capital management strategy. This comes amid recent board meetings to approve the terms and conditions of the NCD issuance, reflecting the company’s proactive approach to funding.

Fundraising Strategy

Instrument: Non-Convertible Debentures (NCDs) – Secured, listed, and redeemable.
Placement Basis: Private placement, targeting institutional and select investors.
Target Amount: Up to ₹6 billion (600 crore).

Recent Developments

Board Approval: The Board of Directors met on June 10, 2025, to consider and approve the terms and conditions of the NCD issuance.
Previous Issues: IIFL Finance has a strong track record of raising capital through NCDs, with recent issues offering yields up to 10.25% and tenures ranging from 15 to 60 months.
Listing: NCDs are typically listed on major exchanges such as the National Stock Exchange (NSE).

Company Overview

Business Focus: IIFL Finance is a leading retail-focused NBFC, offering a diversified portfolio including gold loans, home loans, business loans, microfinance, and capital market finance.
Operational Reach: With over 4,400 branches across 27 states, IIFL Finance serves a vast customer base and maintains a robust capital adequacy ratio.
Recent Performance: The company reported a consolidated net profit decline in Q4 FY25, but maintains healthy profitability and asset quality metrics.

Investor Considerations

Credit Rating: IIFL Finance NCDs are rated AA/Stable by CRISIL and ICRA, indicating a high level of creditworthiness.
Yield and Tenure: Recent NCD issues have offered attractive yields and flexible tenures, appealing to a broad range of investors.
Taxation: Interest earned on NCDs is taxable as per the investor’s income slab.

Conclusion:

IIFL Finance’s latest move to raise up to ₹6 billion via private placement NCDs underscores its commitment to maintaining a strong capital position and supporting continued business expansion. With a robust operational network, diversified loan portfolio, and strong credit ratings, the company remains a key player in India’s non-banking financial sector.

Relevant Sources: Moneycontrol, Business Standard, Rediff Money, BondsIndia, GoldenPi

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