IIFL Finance to raise up to Rs 1,000 crore via bonds, issue opens on August 6

IIFL Finance plans to raise Rs 1,000 crore by sale of non-convertible debentures (NCDs) with a yield as high as 10.5 percent. The public issue opens on August 6 and closes on August 30.

Rating agency CRISIL has given ‘AA/Stable’ rating to the IIFL’s debt instrument. The NCDs will be listed on the BSE and NSE.

“The IIFL Bonds would be issued at face value of Rs 1,000 and the minimum application size is Rs 10,000 across all categories,” the company said.

The lead managers to the issue are IIFL Securities, ICICI Securities, Edelweiss Financial Services and Trust Investment Advisors.

Sumit Bali, CEO, IIFL Finance said the company is confident of raising funds from retail participants in the backdrop of unavailability of institutional investors.

“We are in an environment where interest rates are on their way down. The Reserve Bank of India is further expected to cut rates on August 7. Returns are coming down in fixed deposits and savings accounts. Therefore, it’s an attractive proposition to invest in this instrument,” Bali said.

He added that after the budgetary concessions, banks are expressing interest in lending.

“Banks are open to a conversation on term loans. Hopefully, it’ll materialise this quarter. Still, assignment and securitisation continue to be preferred mode for the banks. Mutual funds as a source continue to not be available,” Bali said.

To enhance liquidity access for the sector, the government said it will provide a one-time 6-month partial guarantee of Rs 1 lakh crore to state-run banks for purchasing consolidated high-rated pooled assets of financially-sound non-banking finance companies.

The crisis in NBFCs, triggered by defaults from two large firms, has created a liquidity crunch for the entire sector. Alternatively, NBFCs that still enjoy a favourable rating are accessing debt markets actively with higher coupon rates to lure retail investors.


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