IIFL Finance is planning to raise ₹10,000 crore through debt over the next six months as part of efforts to diversify its borrowing sources and business, following the lifting of a recent ban, a top executive revealed on Tuesday.
In March, the Reserve Bank of India (RBI) had imposed a ban on IIFL Finance, preventing the non-bank lender from sanctioning and disbursing gold loans due to “material supervisory concerns.” The ban was lifted last week.
“With business picking up again, we need to reassess our funding requirements,” Nirmal Jain, founder and managing director of IIFL Finance, told Reuters. “We don’t need equity capital at the moment, but we may require debt.”
In addition to rupee-denominated debt, IIFL Finance plans to explore the issuance of dollar bonds and a public bond issue later this financial year, Jain said.
As of June-end, more than half of IIFL Finance’s borrowings came from banks, while around 24% were from non-convertible debentures, data showed.
The company aims to reduce its reliance on bank borrowing to below 50%, diversifying its funding mix. Jain indicated that 50-60% of the company’s incremental borrowings could come from external commercial borrowings, dollar bonds, local bonds, and other non-bank sources.
IIFL Finance is also set to recruit between 3,000 and 4,000 employees over the next three months, particularly for its gold loan business, Jain said.
However, after posting a financial loss in the April-June quarter due to the RBI’s ban, the company is focusing on diversifying its loan offerings to reduce risk. The next growth phase will see IIFL Finance expand into loans against property, loans to small and medium enterprises, and both secured and unsecured business loans.
Jain also mentioned that the company is considering listing its mortgage and microfinance arms.
