CRISIL Removes IIFL Finance from 'Rating Watch with Developing Implications', Reaffirms Long Term Rating with 'Stable' Outlook

BusinessWire India
Mumbai (Maharashtra) [India], October 2: IIFL Finance, which is one of India's largest non-banking financial companies, today said that leading rating agency CRISIL has removed IIFL Finance from 'Rating Watch with Developing Implications' and has reaffirmed the rating at 'CRISIL AA/CRISIL AA-/CRISIL PPMLD AA' while assigning a 'Stable' outlook. The short-term rating has been reaffirmed at 'CRISIL A1+'.
In the rating rationale dated September 30th 2024, CRISIL said, "The rating action follows lifting of the regulatory embargo on the gold loan business of IIFL Finance, disclosed by the company vide the announcement dated September 19, 2024, thereby allowing the group to resume sanctions and disbursements in this segment as in the normal course of business, as well securitization/ assignment/ sale of loans."
"The company has demonstrated track record of profitably scaling its gold loan business - which remains one of its core segments. With the regulatory restriction being removed, and the company having taken requisite corrective measures following the action by the Reserve Bank of India (RBI), the group is expected to focus on regaining its market share in the gold loan business which should support the restoration of its market position and profitability, which had moderated during the embargo."
RBI had imposed an embargo on March 04, 2024, asking IIFL Finance to cease and desist from sanctioning and disbursing gold loans or assigning/securitising/selling any of its gold loans. After a special audit and other regulatory inspections, the embargo was lifted on September 19, 2024.
CRISIL further said, "The ratings continue to be supported by the group's comfortable capitalisation, its established track record of operations in home loans and microfinance segments, and sustained profitability metrics, supported by stable asset quality. These strengths are partly offset by limited diversity in the resource profile, with a moderately higher cost of funds vis-a-vis some of the peers."

Kapish Jain, President & Group Chief Financial Officer of IIFL Finance, said, "The outlook change and Rating reaffirmation by CRISIL is a validation of our sound business model and our proven track record of building successful and profitable businesses with highest standards of Governance & transparency."
IIFL Finance offers gold loan, affordable home loan, microfinance loans and business loans and has consolidated assets under management of Rs. 69,610 crore as on June 30, 2024, making it one of the largest retail-focused non-banking finance companies in India. IIFL Finance is present across India through over 4,400 branches and multiple digital platforms catering primarily to the credit needs of unbanked and underbanked small entrepreneurs. IIFL Finance Group is a leading player in gold loan, home loan and microfinance segments.
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