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

Shares of IIFL Finance are in news today as the Mumbai-based non-banking financial company has announced its intention to secure up to ₹600 crore by issuing non-convertible debentures (NCDs) through a private placement. The move is aimed at bolstering long-term resources, in line with the company's strategic focus on retail lending, including gold loans, home finance, and business loans.

IIFL Finance stock ended 1.26% lower at Rs 481.20 on Tuesday against the previous close of Rs 487.35 on BSE.  Market cap of tehe firm fell to Rs 20,444 crore. 

"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 statement read. The issuance will be contingent on market conditions and requisite approvals. This strategic move not only aims to strengthen the company's financial base but also to enhance its competitive edge in the lending market.

The issuance of NCDs is anticipated to optimise IIFL's funding expenses while upholding a sound asset-liability mix. NCDs, being fixed-income securities, offer a reliable source of capital without the need for equity dilution. This financial approach allows the company to maintain its growth trajectory while managing costs effectively. Additionally, it provides a predictable income stream, which is crucial for sustaining long-term growth.

The decision to utilise NCDs aligns with IIFL Finance's broader strategy of sustaining its expanding lending operations. This approach mirrors a wider trend among financial entities seeking cost-efficient capital-raising methods. As the issuance unfolds, it may influence IIFL Finance's market positioning and financial outcomes, with potential growth prospects in retail lending sectors. By concentrating on non-convertible debentures, IIFL Finance aims to consolidate its role in retail lending, thereby enhancing its standing in the financial industry. This decision underscores the company's commitment to innovation and adaptability in a dynamic market environment.