IIFL Finance Shares Surge On Plans To Raise Rs 2,000 Crore Via NCDs

IIFL Finance Ltd. shares rose nearly 4% on Wednesday after the board of directors approved plan to raise Rs 2,000 crore through non-convertible debentures.

The company approved the public issue of secured, rated, listed, redeemable NCDs with the shelf limit of up to Rs 2,000 crore. This also includes green shoe option, if any, in one or more tranches, the company said in an exchange filing on Wednesday.

Fitch Ratings in October revised the outlook on IIFL Finance's Long-Term Issuer Default Rating (IDR) to positive from stable, and affirmed the IDR at 'B+'.

"The outlook revision reflects our view that IIFL's credit profile could improve over the next two years, particularly its business and risk profiles, asset quality and funding diversity. An improved credit profile could be positive for IIFL's ratings," the agency said.

Fitch further said loan growth has rebounded following the lifting of regulatory restrictions on IIFL's gold-backed lending business in September 2024, with broadening funding flows supporting new disbursements in gold-backed loans and other products over the past several months.

The revision also reflects Fitch's expectation of a gradual decline in legacy problem assets over the next two years along with stabilisation of asset quality risks as management pivots the portfolio towards secured lending categories.

It will take time to assess the robustness of IIFL's controls as the business scales following the lifting of the regulatory restrictions, the rating agency said.

The scrip rose as much as 3.61% to Rs 577.50 apiece on Wednesday. It pared gains to trade 2.48% higher at Rs 571.25 apiece, as of 1:52 p.m. This compares to a 1.11% advance in the NSE Nifty 50 Index.

It has risen 38.86% in the last 12 months and 38.11% year-to-date. Total traded volume so far in the day stood at 1.73 times its 30-day average. The relative strength index was at 64.37.