 "IIFL Finance")
IIFL Finance shares: IIFL Finance share price jumped 8.6 per cent to Rs 508.2 per share on the BSE in Tuesday's intraday trade after the non-bank finance company (NBFC) said it has enhanced its compliance, controls, and operations, and have fully complied with all regulatory requirements of the Reserve Bank of India (RBI).
While announcing IIFL Finance's March quarter (Q4) results for financial year 2023-24 (FY24), Founder Nirmal Jain said "the special audit has been completed, and we now await the RBI's review. The company has formed a team to implement corrective actions and revise policies and procedures".
At 11:56 AM, IIFL Finance shares were up 6.3 per cent as against 0.35 per cent gain in the benchmark BSE Sensex.
The management said the regulatory action, imposing an embargo on fresh gold loans, significantly impacted its business in the last quarter and continues to do so in the current quarter (Q1FY25).
IIFL Finance posted a net profit after tax (adjusted for non-controlling interest) of Rs 373.4 crore, down 10 per cent year-on-year (Y-o-Y). Sequentially, it fell 24 per cent quarter-on-quarter.
IIFL Finance's loan asset under management (AUM) at the end of the March 2024 quarter stood at Rs 78,960 crore, up 22 per cent Y-o-Y and barely 2 percent Q-o-Q.
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Segment-wise, Gold loans and Home loans AUM grew by 13 per cent and 26 per cent Y-o-Y, respectively. Microfinance grew by 34 per cent, while Digital loans and Loan against property grew by 71 per cent and 29 per cent Y-o-Y, respectively.
The NBFC's annualised return on equity (RoE) and return on asset (RoA) for Q4FY24 stood at 14.6 per cent and 2.9 per cent, respectively. Pre-provision operating profit, IIFL Finance's financial statement showed, stood at Rs 990 crore for the quarter, clocking an annual growth of 30 per cent. Average borrowing costs for the quarter increased 20 bps Y-o-Y and 6 bps Q-o-Q to 9.13 per cent.
"98 per cent of our loans are retail in nature, and 67 per cent of our retail loans (excluding gold loans, which are not classified as priority sector loans but are still zero risk weights for the banks on a net exposure basis), are PSL compliant. The assigned loan book is currently at Rs 16,488 crore. Besides, there are securitised assets of Rs 274 crore. The co-lending book, including Business Correspondence and Co-origination, stood at Rs 11,639 crore," IIFL Finance said in a statement.
IIFL Finance's asset quality worsened in Q4FY24 with gross non-performing asset (GNPA) at 2.3 per cent up from 1.7 per cent Q-o-Q and 1.8 per cent Y-o-Y. NNPA, meanwhile, stood at 1.2 per cent, higher than 0.9 per cent Q-o-Q and 1.1 per cent Y-o-Y.
"We demonstrated healthy financial performance, reporting RoA of 3.4 per cent and RoE of 18.4 per cent for FY24. With the conclusion of the on ground special audit done at the behest of the RBI and in depth implementation of all the observations highlighted by RBI in inspection report, we firmly believe that we are far better placed today in working and building ourselves for the next phase of controlled and quality growth once the embargo on the gold lending business gets lifted," said Kapish Jain, president & group chief financial officer, IIFL Finance.
IIFL Finance Ltd is one of the leading retail focused diversified NBFCs in India, engaged in the business of loans and mortgages along with its subsidiaries - IIFL Home Finance Limited and IIFL Samasta Finance Limited.
IIFL Finance, through its subsidiaries, offers a wide spectrum of products such as Home loan, Gold loan, Business loan, Microfinance, Capital Market finance, and Developer & Construction finance. It has a customer base of over 8 million.
