IIFL Finance to raise $152 million via share sale amid ban on gold loans

IIFL's gold loans under management stood at 24,692 crore rupees as of December 31

India's IIFL Finance will raise 1,272 crore rupees ($152 million) by selling shares, the non-bank lender said on Wednesday, aiming to shore up capital a month after the central bank barred it from offering gold loans.
 

In mid-March, IIFL had said it would raise up to 1,500 crore rupees via a rights issue, which gives preferential treatment to existing shareholders, but had not finalised the amount.

That plan came nine days after the Reserve Bank of India (RBI) ordered the company to stop sanctioning, disbursing and selling gold loans due to "material supervisory concerns" in its portfolio.
 

 

Since then IIFL's stock has sunk 30 per cent through its closing price on Tuesday. The company will sell shares at 300 rupees each, a 29 per cent discount to the last close.
 

IIFL said shareholders will get one rights share for every nine shares they hold. The issue runs from April 30 to May 14.
 

Fairfax India, IIFL's top shareholder with a 15 per cent stake, had said it would provide up to $200 million in liquidity to support the lender.
 

IIFL's gold loans under management stood at 24,692 crore rupees as of Dec. 31, accounting for 32 per cent of its total assets.