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IIFL Finance Jan.23 NCD Tranche-I issue review (May apply)

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•    This is the 3rd debt offer from IFS since March 2021.
•    Its last debt issue was in the month of Sept-Oct. 2021.
•    This issue has CRISIL AA/Stable and ICRA AA/Stable ratings.
•    Investors looking for steady returns for the medium to long term may park funds. 

IIFL Finance Ltd. (IFL) is a Systemically Important Non-deposit taking Non-Banking Financial Company ("NBFC-ND-SI") registered with the RBI, catering to the credit requirements of a diverse customer base with its plethora of products. Its offerings include home loans, gold loans, business loans including loans against property, medium and small enterprise financing, microfinance, construction, real estate finance, and capital market finance, catering to both retail and corporate clients.

As of September 30, 2022, the company had 3,766 branches across India and 32452 employees (including its subsidiaries) on its payroll.

IFL is coming out with its 3rd debt offer under Tranche-I of the Jan. 2023 issue. The company is issuing secured, redeemable non-convertible debentures (Face Value of Rs. 1000 each) worth Rs. 100 cr. as a base size and has a green shoe option to retain oversubscription up to Rs. 900 cr. making an overall issue size of Rs. 1000 cr. It has a shelf limit of Rs. 5000 cr. This issue is opening on January 06, 2023, and will close on or before January 18, 2023. The minimum application is to be made for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs. 1000) thereon, thereafter. Post allotment, NCDs will be listed on BSE and NSE. IFL is spending Rs. 19.58 cr. for this Rs. 1000 cr. debt issue, and from the residual funds, it will spend at least up to 75% for onward lending, financing, repayment/prepayment of certain borrowings, and up to 25% for general corporate purposes. 

The issue is jointly lead managed by Edelweiss Financial Services Ltd., IIFL Securities Ltd., Equirus Capital Pvt. Ltd., Trust Investment Advisors Pvt. Ltd., while Link Intime India Pvt. Ltd. is the registrar of the issue, and Vardhman Trusteeship Pvt. Ltd. is the debenture trustee. 

This debt issue has tenors of 24 months, 36 months, and 60 months with interest payment frequencies of Monthly, Annual, and Cumulative as per the selection of series applied by the investors. This issue has coupon rates ranging from 8.50% to 9.00%. IFL has allocated 10% for Institutional investors, 10% for Non-Institutional investors, 40% for HNIs, and 40% for Retail investors. 

This issue has the CRISIL AA/Stable from CRISIL Ltd. and ICRA AA/Stable from ICRA Ltd. The aforesaid rating indicates that instruments with this rating are considered to have a high degree of safety regarding the timely servicing of financial obligations and carry very low credit risk. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating agency has a right to suspend or withdraw the rating at any time on the basis of factors such as new information.

On the financial performance front, for the last three fiscals, IFL has (on a consolidated basis) posted a total income/net profit of Rs. 4926.13 cr. / Rs. 553.38 cr. (FY20), Rs. 5989.69 cr. / Rs. 760.81 cr. (FY21), and Rs. 7006.28 cr. / Rs. 1188.25 cr. (FY22). For H1 of FY23, it earned a net profit of Rs. 726.81 cr. on a total income of Rs. 4026.62 cr. Thus it has reported steady growth in its top and bottom lines. 

As of September 30, 2022, its paid-up equity capital of Rs. 75.95 cr. was supported by free reserves of Rs. 8283.49 cr. On the said date its net NPA stood at 1.22% against 1.83% for FY22. Its debt-equity ratio of 3.75 as of September 30, 2022, will stand enhanced to 4.28.

Conclusion / Investment Strategy

This is the 3rd debt offer from IFL since March 2021. It has posted steady growth in its top and bottom lines for the reported periods of the offer document. Investors looking for steady returns may consider investment for the medium to long term.

Review By Dilip Davda on January 4, 2023

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

(Dilip Davda -SEBI registered Research Analyst-Mumbai,

Registration no. INH000003127 (Perpetual)

Email id: ).

The IIFL Finance NCD January 2023 Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered NCD Analysts tells you if IIFL Finance NCD January 2023 worth investing. The IIFL Finance NCD January 2023 Note sets the NCD expectations in systematic way which tells you if IIFL Finance NCD January 2023 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in IIFL Finance NCD January 2023 by providing NCD recommendations i.e. subscribe, avoid and neutral.