IIFL Finance on Friday opened a public issue of secured bonds to raise up to ₹1,500 crore for business growth and capital augmentation. 

The issue will close on June 22, 2023, with an option of early closure. The allotment will be made on a first-come-first-served basis. IIFL Finance will issue secured redeemable non-convertible debentures (NCDs), aggregating to ₹300 crore, with a green-shoe option to retain over-subscription of up to ₹1,200 crore (aggregating to a total of ₹1,500 crore).

The bonds will be issued at a face value of ₹1,000 and the minimum application size is ₹10,000 across all categories.

The bonds offer the highest effective yield of 9 per cent per annum for a tenor of 60 months. The NCD is available in tenors of 24 months, 36 months and 60 months. The frequency of interest payment is available on an annual, at maturity basis and with monthly option for 60-month tenure.

Also read: IIFL Finance fully repays its maiden $400 million dollar-bonds issue

‘Frictionless experience’

The credit rating has been AA/Stable by CRISIL Ratings and AA/Stable by ICRA, which indicates that the instruments carry very low credit risk. In Q4 FY23, Moody’s upgraded IIFL Finance’s rating from B2 to B1 (stable).

Sreekant Rameela, Vice President, IIFL said, “IIFL Finance through a strong physical presence of over 4,000 branches across India and a well-diversified retail portfolio caters to the credit needs of underserved population. The funds raised will be used to meet credit needs of more such customers and accelerate our digital process transformation to enable a frictionless experience.”

The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited, Equirus Capital Private Limited and Trust Investment Advisors Private Limited. The NCDs will be listed on the BSE and NSE, to provide liquidity to investors. 

Also read: India bond yields rise after RBI holds rates, says inflation above target

Mitigating risks

IIFL Finance’s Loan Assets under Management is ₹64,638 crore as on March 31, 2023, with about 95 per cent of the book being retail - which is focused on small-ticket loans.

It has a Gross NPA of 1.8 per cent and Net NPA of 1.1 per cent.  As on March 31, about 73.53 per cent of the company’s consolidated loan book is secured with adequate collaterals.

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