IIFL Finance shares surge 23% in 4 sessions, up 39% from March low

The shares of IIFL Finance, a leading non-banking financial company (NBFC) specializing in retail credit, have recently experienced a significant resurgence. This turnaround comes after a substantial sell-off observed in the first three weeks of March, prompted by RBI restrictions on its gold loan disbursements.

On April 05, the stock saw a notable uptick of 13.18% following the revision of the price band limit, increased to 20% from the previous 10%. Additionally, on April 02, the company announced NSE approval to acquire equity shares worth up to ₹284.40 crore through an off-market transfer from FIH Mauritius Investments.

Despite the rebound, the shares are trading 38% lower from their peak of ₹704 per share. The RBI imposed restrictions on IIFL Finance on March 04, prohibiting gold loan sanctioning and disbursals due to supervisory concerns.

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To bolster its financial position, the company raised ₹500 crore through non-convertible bond issuance on March 21, part of a plan to raise ₹2,000 crore. These bonds carry a 9.50% per annum interest rate, maturing on March 20, 2027.

IIFL Finance, a key RBI-regulated NBFC, specializes in retail credit, providing small-ticket gold, home, and business loans. Its loan assets total approximately ₹78,000 crores, with a net worth exceeding ₹10,000 crore.

As of December 31, 2023, gold loan assets under management reached ₹24,692 crore, comprising 32% of total loan assets, witnessing a 35% YoY surge in Q3 FY24. The company serves various segments, including salaried individuals, self-employed professionals, and MSMEs.