IIFL Finance: A Rising Force in India's Gold Loan Market

Standard and Poor's (S&P) has upgraded IIFL Finance's outlook to 'Positive' due to its recovering position in the gold loans market. The company's strong capitalization is expected to support its growth, while improved profitability and reduced credit costs bolster its future financial stability.

Standard and Poor's Global Ratings recently adjusted its outlook on IIFL Finance to 'Positive' from 'Stable,' based on the company's strengthening market position in the gold loan sector. S&P reaffirmed its 'B+/B' ratings both long and short-term, highlighting IIFL's resilience following the lifting of a central bank embargo on gold loans.

S&P's assessment underscores IIFL's solid capitalization strategies, which are anticipated to sustain growth in gold-backed financing. The company's robust performance benefits from high gold prices, increased demand, and an expansive branch network, yielding a significant rise in gold loans under management by September 2025.

Despite past challenges with elevated credit costs, notably in the microfinance sector, S&P expects IIFL to reduce these costs progressively. The credit rating agency foresees an improvement in the company's profitability, driven largely by decreased credit costs and IIFL's strategic adjustments away from higher-risk financial products.

(With inputs from agencies.)