Thursday, January 17, 2019

IIFL Finance to raise up to Rs. 2,000 crore via Bonds

IIFL Bonds offer yield of 10.50% p.a. for individuals and 10.35% for institutional category for tenor of 120 months

IIFL Holdings Limited, today said, its subsidiary, India Infoline Finance Limited (IIFL Finance), a leading Non-Banking Financial Company, will open a public issue of bonds on January 22, 2019, to raise up to Rs. 2,000 crore, for the purpose of business growth and expansion.  
The UK-based CDC Group backed IIFL Finance will issue secured and unsecured redeemable non-convertible debentures (NCDs), aggregating to Rs 250 crore, with a green-shoe option to retain over-subscription up to Rs 1,750 crore (aggregating to a total of Rs 2,000 crore).
The IIFL Bonds offer highest yield of 10.50% p.a. for Individual and Other categories, and 10.35% for Institutional category, for tenor of 120 months with frequency of monthly and annual payment. The other tenors offered are for 39 and 60 months.
CRISIL has rated the instrument as AA/Stable, which indicates that the instruments are considered to have a high degree of safety for timely servicing of financial obligations and carry very low credit risk.
Prabodh Agrawal, IIFL Group CFO said: “The funds raised through this Issue will be used for the purpose of onward lending, financing, and for general corporate purpose. Each of the previous bond issues from IIFL Group have been over-subscribed and repaid in a timely manner.”
Sumit Bali, CEO, IIFL Finance said, “Through our strong physical presence of 1,755 branches across India and a well-diversified portfolio, we are able to meet the credit requirement of various  segments of underserved population. The funds raised will help us in expanding our operation in more such areas.”
IIFL Finance’s profit after tax stood at Rs 357.2 crore for the half year ended September 30, 2018 , posting a growth of 69% y-o-y and its loan assets under management (AUM), predominantly retail, showed a strong growth of 40% y-o-y to reach Rs 36,373 crore, mainly driven by small-ticket home loans, which grew 59% y-o-y, SME finance loans which grew 113% y-o-y and microfinance loans which grew 259% y-o-y as on September 30, 2018.
Retail loans, including home loans and small business finance, constituted 85% of the loan book, and 46% of the loans were compliant with RBI’s priority sector lending (PSL) norms. The securitized loan book constituted 15% of the AUM and asset quality remained sound with Gross NPA of 2.2% and Net NPA of 1.0%. IIFL Finance is well-capitalized NBFC with a net worth of Rs 4000 crore and Total Capital Adequacy Ratio (CAR) of 18.7% as at September 30, 2018, including Tier I capital of 15.5%, as against the statutory requirement of 15% and 10% respectively.
The step-down subsidiary IIFL Home Finance focusses on affordable housing segment and is one of the leading players in disbursing Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojna. Since the launch of the scheme in 2015, CLSS beneficiary numbers of IIFL Home Finance has grown from 65 in FY 2015-16 to about 20,000 in December, 2018. 
The lead managers to the issue are Edelweiss Financial Services, ICICI Securities, IIFL Holdings Limited, and Trust Investment Advisors. The NCDs will be listed on the BSE Limited and National Stock Exchange of India Limited (NSE), to provide liquidity to investors. 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 public issue opens on January 22, 2019 and closes on February 20, 2019, with an option of early closure. The allotment will be made on first come first served basis.

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