IIFL Finance Greenlights ₹1,500 Crore Equity Raise

On March 13, 2024, The Board of IIFL Finance approved fundraising up to ₹1500 crore through the rights issue of equity shares. Further, the Board also approved raising up to ₹500 crore through the issue of non-convertible debentures on a private placement basis.

IIFL Finance’s Fundraising Move

On Wednesday, the board of the non-banking finance company IIFL Finance approved raising up to ₹1,500 crore via the issue of equity shares. This decision comes days after the Reserve Bank of India (RBI) barred the company from offering gold loans. Also, the company also announced that they would raise another ₹500 crore via non-convertible debentures on a private placement basis. After the fundraising announcement, shares of IIFL Finance surged about 3% during the early trading session. On the NSE, the share price of IIFL Finance Ltd closed at ₹384.14 on March 13, 2024.

The proposal for fundraising comes after the top shareholder, Fairfax India Holding Corporation, agreed to offer up to $200 million in liquidity support to IIFL Finance to assuage liquidity concerns among investors and lenders after the central bank’s regulatory action. However, the mode in which the liquidity support will be provided to the company has not been specified.

Fairfax India Holding Corporation stated that they have been long-term investors in the IIFL Group of companies and have full trust and confidence in the company’s strong management team led by Nirmal Jain and R Venkataraman. They are confident that the management will take the right steps to meet and exceed RBI’s compliance standards. They further added that the infusion will be done on terms that are yet to be mutually agreed upon and subject to applicable laws.

Nirmal Jain, IIFL Finance Director and Founder called Fairfax India’s offering generous, timely and motivating. He also said that IIFL Finance is committed to fully complying with the RBI’s directives.

As of Q3 FY 2024’s shareholding pattern, an entity of Fairfax, Fih Mauritius Investments, held a 15.12% stake in IIFL Finance.

About IIFL Finance Ltd

IIFL Finance Ltd is a diversified Non-Banking Financial Corporation (NBFC) in India that is involved in the business of loans and mortgages. The company provides a wide range of products, including gold loans, home loans, etc. On March 14, 2024, Thursday, the share price of IIFL Finance Ltd opened at ₹384.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.