IIFL Finance to open public issue of bonds next week to raise Rs 1,000 cr

IIFL Finance on Friday said it will launch a public issue of bonds next week to raise to Rs 1,000 crore to augment its capital base.

Backed by Fairfax and CDC Group, IIFL Finance will issue unsecured redeemable non-convertible debentures (NCDs), with a base issue size of Rs 100 crore and a green-shoe option to retain oversubscription of up to Rs 900 crore, aggregating to Rs 1,000 crore, the company said in a release.

The public issue of bonds will open on March 3, 2021, for business growth and capital augmentation.

The IIFL bonds offer the highest yield of 10.03 percent per annum for the tenor of 87 months, it said adding the NCD is available in various options like monthly, annual, and at maturity.

The company said that in the current scenario, the rate of interest offered by it is very attractive compared with other debt products.

''Through a strong physical presence of 2500 branches across India and a well-diversified retail portfolio, IIFL Finance caters to the credit need of the underserved population. The funds raised will be used to meet the credit need of more such customers and accelerate our digital process transformation to enable a frictionless experience," Rajesh Rajak, CFO, IIFL Finance said.

IIFL Finance's loan assets under management stand at Rs 42,264 crore as of date. The company's 90 percent of the book is retail which is focused on small-ticket loans.

Its gross NPA is at 1.61 percent and net at 0.77 percent. The company registered a net profit of Rs 268 crore in December quarter 2020-21, up by 26 percent from the year-ago period. The return on equity was 18.4 percent.

The lead managers to the public issue of bonds are Edelweiss Financial Services, IIFL Securities, and Equirus Capital.

The NCDs will be listed on BSE and NSE to provide liquidity to investors, it said.

Bonds would be issued at a face value of Rs 1,000 each and the minimum application size is Rs 10,000 across all categories. The issue will close on March 23 with an option of early closure.

The allotment will be made on a first come first served basis, IIFL Finance said.

IIFL Finance stock was trading at Rs 274.35 on BSE, down 1.24 percent from the previous close.