IIFL Fin June 23 Tranche II NCD issue review (Apply)

• IFL is an RBI-registered NBFC catering to credit requirements for retail and corporate clients.
• This is the 4th debt offer from the company since March 2021.
• It has been posting growth in its top and bottom lines for the last three fiscals.
• The company has a sound financial track record.
• Investors looking for a steady return for the medium to long term may park funds.

ABOUT COMPANY:
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, loans against property and medium and small enterprise financing, microfinance, construction and real estate finance and capital market finance, catering to both retail and corporate clients.

Its total Asset Under Management (AUMs) was Rs. 44688.03 cr. (FY21), Rs. 51209.79 cr. (FY22), and Rs. 64537.64 cr. As of March 31, 2023, it had 4267 branches and 33910 employees on its payroll.

IFL's revenue from operations on a consolidated basis grew at a CAGR of 19.46% and on a standalone basis grew at a CAGR of 15.27% over the last three Fiscals.

This is the 4th debt offer from IFL since March 2021, and the last debt offer was in January 2023.

ISSUE DETAILS:
The company is coming out with its Tranche II NCD issue to mobilize Rs. 1500 cr. The base size of the issue is Rs. 300 cr. and it has a green shoe option to retain oversubscription to the tune of Rs. 1200 cr. The shelf limit of this debt offer is Rs. 5000 cr. The company is issuing Secured Redeemable Non-Convertible Debentures having a face value of Rs.1000 each. The issue opens for subscription on June 09, 2023, and will close on or before June 22, 2023. The minimum application to be made is for 10 NCDs (i.e. Rs. 10000) and in multiple of 1 NCD (i.e. Rs.1000) thereon, thereafter. The allotment will be made on a "First Come - First Served" basis. Post-allotment NCDs will be listed on BSE and NSE. The company will be spending Rs. 26.11 cr. for Tranche II of the debt issue and from the net proceeds, it will utilize at least 75% for the purpose of onward lending, financing, refinancing existing indebtedness of the company, and maximum 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. and Trust Investment Advisors Pvt. Ltd., Link Intime India Pvt. Ltd. is the registrar of the issue, and Vardhman Trusteeship Pvt. Ltd. is the Debenture Trustee.

This issue has a tenor of 24 months, 36 months and 60 months and interest payment frequency of Monthly, Annual or Cumulative basis as per the selection of the series by the investors. It carries coupon rates ranging from 8.35% to 9.00%.

CREDIT RATINGs:
This debt offer is rated CRISIL AA/Stable by CRISL Ltd., and ICRA AA/Stable by ICRA Ltd. The rating given by CRISIL and ICRA are valid as of the date of this Tranche II Prospectus and shall remain valid until the ratings are revised or withdrawn. 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.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, IFL has (on a consolidated basis) posted a total income/net profit of Rs.5968.04 cr. / Rs. 760.81 cr. (FY21), Rs. 7023.61 cr. / Rs. 1188.25 cr. (FY22), and Rs. 8447.11 cr. / Rs. 1607.55 cr. (FY23). As of March 31, 2023, its paid-up equity capital of Rs. 76.09 cr. is supported by free reserves of Rs. 8915.97 cr. Its current debt-equity ratio of 3.88 will rise to 4.03l post this issue. Its net NPA as of March 31, 2023, was at 1.08% against 1.83% a year ago. Its loan book as of March 31, 2023, stood at Rs. 40101.87 cr.

Conclusion / Investment Strategy

IFL is one of the leading NBFCs catering to retail and corporate clients for credit requirements. It has posted steady growth in its working for the last three fiscals and thus has a sound track record. Investors looking for steady income may park funds for the medium to long term.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on June 8, 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 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: dilip_davda@rediffmail.com ).

The IIFL Finance NCD Tranche II June 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 Tranche II June 2023 worth investing. The IIFL Finance NCD Tranche II June 2023 Note sets the NCD expectations in systematic way which tells you if IIFL Finance NCD Tranche II June 2023 good to buy (good or bad / yes or no). The NCD Forecast tells you weather to invest in IIFL Finance NCD Tranche II June 2023 by providing NCD recommendations i.e. subscribe, avoid and neutral.

IIFL Fin June 23 Tranche II NCD issue review (Apply)

Conclusion / Investment Strategy

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