IIFL Finance shares in focus today as NBFC to raise funds via NCDs

By Admin

11 Jun, 2025

Mumbai-based non-banking financial company (NBFC) IIFL Finance is in the spotlight today as the company announces plans to raise up to ₹600 crore through the issuance of non-convertible debentures (NCDs) via private placement. This strategic move is designed to strengthen the company’s long-term resources, in alignment with its ongoing focus on retail lending, which includes gold loans, home finance, and business loans.

A Strategic Step for Growth

According to the company, “The Board of Directors of the company has approved the issuance of secured redeemable NCDs, aggregating up to ₹600 crore, in one or more tranches.” The actual issuance will depend on prevailing market conditions and regulatory approvals. By choosing NCDs, IIFL Finance seeks to optimize funding costs while maintaining a robust asset-liability mix.

Why NCDs?

Non-convertible debentures offer a fixed-income investment without diluting equity, providing a stable source of funding. For IIFL, this means managing capital more efficiently while supporting the expansion of its lending book. It also provides a predictable income stream, helping the company maintain financial stability over the long term.

Impact on Shares and Market Position

Despite this forward-looking strategy, IIFL Finance shares ended 1.26% lower at ₹481.20 on Tuesday, down from the previous close of ₹487.35 on the BSE. The firm’s market capitalization slipped to ₹20,444 crore. However, this short-term movement may not fully capture the long-term potential the NCD issuance brings to the table.

Strengthening Retail Lending Focus

This decision is in line with IIFL Finance’s broader objective of deepening its presence in retail lending. The company aims to leverage cost-effective capital raising methods, a trend increasingly being adopted by financial institutions across the sector. The infusion of funds through NCDs is expected to enhance the company’s competitiveness and fuel growth in its key lending verticals.

Forward Outlook

As the NCD issuance unfolds, investors and market watchers will be keenly observing how this move shapes the company’s financial performance and market positioning. By reinforcing its financial structure and avoiding equity dilution, IIFL Finance is demonstrating a strategic blend of innovation and resilience in a rapidly evolving financial environment.