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Fairfax-backed IIFL Finance to raise $152 mn via share sale amid ban on gold loans
VCCircle
·
1y ago
Medial
Indian non-bank lender IIFL Finance plans to raise INR 12.72 billion ($152 million) through a share sale, as it looks to strengthen its capital base following a recent ban on offering gold loans by the Reserve Bank of India. The company had previously announced plans for a rights issue worth INR 15 billion, but the final amount was not confirmed. IIFL Finance's stock has dropped 30% since the ban was imposed. The shares will be sold at a 29% discount to the last closing price of INR 300 each. Shareholders will receive one rights share for every nine shares they hold.
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IIFL Finance says Watsa's Fairfax to invest up to $200 mn in liquidity support
Livemint
·
1y ago
Medial
IIFL Finance is set to receive a $200 million investment from Fairfax India as liquidity support after the Reserve Bank of India (RBI) barred the company from disbursing gold loans due to supervisory concerns. Fairfax India, which already holds a 15.1% stake in IIFL, has agreed to provide the investment subject to regulatory approvals. IIFL Finance reassured investors that there would be no significant impact on profitability in the near term, as the company had sufficient liquidity and would continue to recover dues from existing customers. However, analysts have downgraded their recommendation on IIFL Finance stock due to the potential impact of the RBI's restrictions.
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Fairfax commits $200 mn to IIFL Finance after RBI ban on gold loans
VCCircle
·
1y ago
Medial
Fairfax India Holdings Corporation has committed $200 million in liquidity support to IIFL Finance after the Reserve Bank of India (RBI) banned the lender's gold loan operations due to concerns over purity certification and breaches in loan-to-value ratio. Fairfax, led by Prem Watsa, has full trust in IIFL Finance's management team and believes they will take necessary corrective actions to meet RBI's compliance standards. This commitment comes as Fairfax continues to monetize its India portfolio. IIFL is a major player in the small-ticket gold, home, and business loan market, with assets under management worth Rs 78,000 crore.
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Fairfax-backed IIFL Finance faces liquidity crunch after RBI curbs
VCCircle
·
1y ago
Medial
IIFL Finance, backed by Fairfax, is facing a liquidity crisis after Indian banks became cautious about lending to it. This comes after the Reserve Bank of India imposed restrictions on IIFL's gold loan business due to supervisory concerns. Banks have stopped lending to IIFL's gold and other businesses, affecting the firm's overall business. Fairfax India, the company's top shareholder, has agreed to provide up to $200 million in liquidity support. IIFL Finance has raised funds through bonds and is planning a rights issue of shares to mitigate the liquidity concerns.
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IIFL Home Finance to raise nearly ₹3,000 crore through bond issue: Report | Mint
Livemint
·
10m ago
Medial
- IIFL Home Finance plans to raise approximately ₹3,000 crore through a public issue of bonds. - The lead managers for the bond issue are Trust Investment Advisors and IIFL Securities, both rated AA by Crisil and India Ratings. - The details of the bond issue have not been finalized yet. - IIFL Finance is aiming to raise ₹10,000 crore through debt between October and March to recover from the RBI's ban on issuing gold loans. - The RBI recently lifted the ban on IIFL Finance's gold loan business, resulting in a surge of over 12% in the company's shares. - HSBC upgraded IIFL Finance stock to 'hold' from 'reduce' after the RBI's decision, with a higher target price of ₹540, and increased its earnings per share estimates.
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IIFL looks to raise $1.2 bn in debt amid RBI ban
VCCircle
·
10m ago
Medial
IIFL Finance, an Indian non-bank lender, plans to raise INR 100 billion ($1.2 billion) in debt over the next six months in an effort to diversify its borrowing sources and recover from a recent ban. The Reserve Bank of India had banned IIFL Finance from sanctioning and disbursing gold loans, citing supervisory concerns. The ban was recently lifted, prompting the company to reassess its funding needs. IIFL Finance aims to reduce bank borrowing to under 50% and explore external commercial borrowings, dollar bonds, local bonds, and other non-bank sources for its incremental borrowing needs. The company also plans to diversify its loan products and recruit more employees.
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Ex-RBI deputy governor Kanungo may join IIFL board
Economic Times
·
1m ago
Medial
Former RBI Deputy Governor BP Kanungo is set to join IIFL Finance as an independent director, replacing AK Purwar. The move follows IIFL's efforts to enhance its governance framework after RBI lifted a ban on gold loans, imposed for regulatory non-compliance. Kanungo, noted for his risk management expertise, is expected to aid in improving IIFL's governance structure. IIFL's gold loan assets doubled post-ban lift, but net profit fell by 79% in FY25 due to prior restrictions.
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RBI bars Fairfax-backed IIFL Finance from sanctioning, disbursing gold loans
VCCircle
·
1y ago
Medial
India's central bank, the Reserve Bank of India (RBI), has ordered non-bank entity IIFL Finance to halt the sanctioning and disbursing of gold loans due to "material supervisory concerns" found in its gold loan portfolio. The RBI identified issues such as improper assessment of collateral and breaching loan-to-value ratios. The company is able to continue servicing existing gold loan portfolios. IIFL Finance has not yet responded to the RBI's order.
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Muthoot Finance shares slip 14% in two sessions, here's why
Business Today
·
3m ago
Medial
Muthoot Finance shares dropped 14% over two sessions, hitting an intra-day low of Rs 1964.35, from a previous close of Rs 2140.30 on the BSE. This decline is due to anticipated RBI guidelines for gold loans. The new regulations are expected to affect other gold financing entities like Manappuram Finance and IIFL Finance. RBI Governor Sanjay Malhotra announced forthcoming comprehensive draft guidelines to harmonize regulations for loans secured by gold jewellery.
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RBI to conduct special audit of IIFL Finance, JM Financial for regulatory breaches
Livemint
·
1y ago
Medial
The Reserve Bank of India (RBI) has initiated a special audit for IIFL Finance Ltd and JM Financial Products Ltd due to regulatory breaches. It has invited bids from audit firms for conducting the audits, with the last date for submission being April 8. This comes after the RBI imposed restrictions on IIFL Finance and JM Financial Products in March for non-compliance with regulatory guidelines. IIFL Finance was barred from sanctioning gold loans, while JM Financial Products was prohibited from providing financing against shares and debentures.
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IIFL Finance shares plunge after RBI bars firm from offering gold loans
VCCircle
·
1y ago
Medial
Shares of IIFL Finance, an Indian non-banking finance company, dropped 20% after the Reserve Bank of India (RBI) barred the firm from offering gold loans due to "material supervisory concerns" in its portfolio. The RBI found serious deviations in collateral assessment, breaches in loan-to-value ratio limits, and lack of transparency in charges. A prolonged restriction may impact earnings, lower co-lending income and increase cost of finances. IIFL Finance stated that it has been taking corrective action and the impact on financials will depend on the resolution time.
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