IIFL Finance, one of India’s largest Non-Banking Financial Companies, will open a public issue of secured bonds on June 9, 2023, to raise up to Rs. 1,500 crores, for the purpose of business growth and capital augmentation. The bonds offer up to 9% yield and high degree of safety.
IIFL Finance will issue secured redeemable non-convertible debentures (NCDs), aggregating to Rs 300 crores, with a green-shoe option to retain over-subscription of up to Rs 1200 crores (aggregating to a total of Rs 1,500 crores).
The IIFL bonds offer highest effective yield of 9 % per annum for tenor of 60 months. The NCD is available in tenors of 24 months, 36 months and 60 months. The frequency of interest payment is available on annual,at maturity basis and with monthly option for 60-month tenure.
The credit rating has been AA/Stable by CRISIL Ratings and AA/Stable by ICRA, which indicates that the instruments are considered to have a high degree of safety for timely servicing of financial obligations and carry very low credit risk. In Q4 FY23, Moody’s upgraded IIFL Finance’s rating from B2 to B1 (stable).
Darshit Doshi, Zonal Head, IIFL Finance said, “IIFL Finance through a strong physical presence of over 4000 branches across India and a well-diversified retail portfoliocaters to the credit needs of underserved population. The funds raised will be used to meet credit need of more such customers and accelerate our digital process transformation to enable a frictionless experience.”
He added, “IIFL has an impeccable track record of more than 25 years and all the bond issues and the debt obligations have always been paid on time.” In April, IIFL Finance duly repaid $400 million worth of dollar bonds, raised through medium-term notes in February 2020.
IIFL Finance is one of India’s largest retail-focused financial services companies. IIFL Finance’s Loan Assets under Management is Rs 64,638 crore as on March 31, 2023. Most importantly, 95 % of the book is retail – which is focused on small-ticket loans.
IIFL Finance has consistently maintained low level of NPAs over the years of operations and continues to focus on good quality of assets with Gross NPA of 1.8 % and Net NPA of 1.1 %. As on March 31, about 73.53 % of the company’s consolidated loan book is secured with adequate collaterals which helps to mitigate risks further.
In FY23, IIFL Finance reported a profit after tax of Rs 1,607.5 crore, up 35 % on year with a robust return on equity of 19.9%. It has strong relationship with multiple banks and financial institutions.
The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited, Equirus Capital Private Limited and Trust Investment Advisors Private Limited. The NCDs will be listed on the BSE Limited and National Stock Exchange of India Limited (NSE), to provide liquidity to investors. The IIFL Bonds would be issued at face value of Rs 1,000 and the minimum application size is Rs 10,000 across all categories. The public issue opens on June 09, 2023 and closes on June 22, 2023, with an option of early closure. The allotment will be made on first come first served basis.
