Fitch Assigns 'B+' Rating To IIFL Finance's $1 Billion Global Medium-Term Notes

Fitch Ratings has assigned has assigned a 'B+' rating to IIFL Finance Ltd.'s $1 billion secured global medium-term note programme, the rating agency said.

This has come after IIFL Finance updated and converted its existing secured medium term note programme to global medium term note programme.

The proposed notes will be listed on the India International Exchange.

Net proceeds of these notes will be used for on-lending and to support the company's growth. HSBC, Mizuho, and Standard Chartered Bank are lead managers for this issue, the offering circular said.

This overseas fundraising by IIFL Finance has come as the Reserve Bank of India in late September last year lifted the nearly seven-month restrictions on the company's gold loan business.

The banking regulator had imposed curbs on the non-bank lender's gold business on March 4, citing serious operation lapses such as assaying and certifying purity and net weight of the gold at the time of sanction of loans and at the time of auction upon default; and breaches in loan-to-value ratio.

The company was also found to have significant disbursal and collection of loan amount in cash far in excess of the statutory limit; non-adherence to the standard auction process; and lack of transparency in charges being levied to customer accounts, among others.

For the quarter ended September, IIFL Finance's assets under management on a standalone basis were $ 2,074 mn. Of this, the gold loan business forms $1,289 mn, according to the investor presentation.

After the full resumption of gold lending business, the company's loan assets recovered from $1,217 mn at the time of restriction removal to $1,791 mn as of December 30, 2024.

Despite restrictions, 1.2 million customers repaid loans and retrieved jewellery, redirecting $2.2 billion to banks and lenders without any repayment issues.