IIFL Finance to raise up to Rs. 1,000 crore via secured bonds, offers up to 8.75% yield
IIFL Finance, one of India’s largest Non-Banking Financial Companies, will open a public issue of secured bonds on September 27, 2021, to raise up to Rs. 1,000 crore, for the purpose of business growth and capital augmentation. The bonds offer up to an 8.75% yield and a high degree of safety.
The Fairfax-backed IIFL Finance will issue secured redeemable non-convertible debentures (NCDs), aggregating to Rs 100 crore, with a green-shoe option to retain over-subscription up to Rs 900 crore (aggregating to a total of Rs 1,000 crore).
The IIFL bonds offer the highest effective yield of 8.75% per annum for the tenor of 60 months. The company will also offer an incentive of 0.25% p.a for existing bond or equity shareholders of the company. The NCD is available in tenors of 24 months, 36 months, and 60 months. The frequency of interest payment is available on a monthly, annual, and at maturity basis for 60 months tenor, while for other tenors it is available on an annual and at maturity basis.
The credit rating has been AA/Stable by Crisil and AA+/negative by Brickwork, 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.
Rajesh Rajak, CFO, IIFL Finance said, “Through a strong physical presence of over 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 needs 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.”
IIFL Finance is one of India’s largest retail-focused financial services companies. IIFL Finance’s Loan Assets under Management are Rs 43,160 crore as of June 30, 2021. Most importantly, 93% of the book is retail – which is focused on small-ticket loans.
IIFL Finance has consistently maintained a low level of NPAs over the years of operations and continues to focus on the good quality of assets with a gross NPA of 2.21% and Net NPA of 1.02%. As of June 30, about 86% of the company’s consolidated loan book is secured with adequate collaterals which help to mitigate risks further.
In Q1 FY22, IIFL Finance reported a profit after tax of Rs 266 crore, up 735% on year with a robust return on equity of 19.7%. It has a strong relationship with multiple banks and financial institutions.
The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited, and Equirus Capital 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 a face value of Rs 1,000 and the minimum application size is Rs 10,000 across all categories. The public issue opens on September 27, 2021, and closes on October 18, 2021, with an option of early closure. The allotment will be made on a first-come first-served basis.
About IIFL Finance
IIFL Finance Ltd is one of the leading retail-focused diversified NBFC in India, engaged in the business of loans and mortgages along with its subsidiaries – IIFL Home Finance Limited and Samasta Microfinance Limited. IIFL Finance, through its subsidiaries, offers a wide spectrum of products such as Home loans, Gold loans, Business loans, Microfinance, Capital Market finance, and Developer & Construction finance to a vast customer base of over 6 million customers. IIFL Finance has widened its pan-India reach through an extensive network of branches spread across the country and various digital channels.