IIFL Finance has set an internal target to grow its assets under management (AUM) to ₹1-lakh crore in three years from about ₹55,300 crore now, according to its Founder and Managing Director Nirmal Jain. The non-banking financial company (NBFC) has put in place the building blocks — branches, people and technology, said Jain in an interview with buinessline. The systemically important non-deposit taking NBFC’s core products include gold, home, business and microfinance loans, while non-core products include construction and real estate finance and capital market finance.

According to him, the NBFC may apply for a digital banking licence as and when the RBI announces guidelines and could list its housing finance and microfinance subsidiaries in three-five years. Edited excerpts:

Q

How long will it take you to grow your AUM to ₹1-lakh crore?

Three years…We aspire to have AUM of ₹1-lakh crore in three years’ time.

So, we already have a three-year plan — the branch network (over 3,500 branches) is in place…people (about 34,000 staff) we already have, but we can hire more. And technology investment we continue to do. So, I think we have already done a lot of hard work in terms of setting up the branches and hiring people. We just need to take it forward, The ecosystem is conducive, with more and more banks joining the account aggregator network and we can collaborate with more banks through co-lending.

Q

Do you see IIFL Finance getting converted into a bank?

The guidelines on digital banking are not out yet. We have invested a lot in digital technology. It makes sense for us to wait for the guidelines and then evaluate the alternatives.

Q

Has your funding requirement gone down due to co-lending and direct assignment of loans?

Co-lending with and direct assignment to banks is working well. So, our (funding) requirement has reduced significantly. We typically raise ₹5,000-7,000 crore via bonds in a year. We will definitely raise funds, but maybe our requirements will be lesser. We have liquidity (free cash, equivalent and undrawn lines) of about ₹8,000 crore. So, there is no desperate need to go to the market and raise funds.

Q

What are your plans for subsidiaries — IIFL Home Finance and IIFL Samasta Finance (formerly Samasta Microfinance)?

They may get listed in three-five years and become independent businesses. The criteria (for listing) is that they should be among top 2 and 3 when they get listed in their segment/sector. Now, there is private equity investment by a wholly-owned subsidiary of Abu Dhabi Investment Authority in home finance. So, we will have to consider that as well.