India’s IIFL Finance plans to raise 100 billion rupees ($1.20 billion) via debt in the next six months and diversify both its borrowing sources and business, a top official said on Tuesday, as the non-bank lender looks to recover from a recent ban.
In March, India’s central bank had ordered IIFL Finance to stop sanctioning and disbursing gold loans, citing “material supervisory concerns”. The ban was lifted last week.
“As business picks up again, we will have to reassess our requirement for funds,” Nirmal Jain, founder and managing director, told Reuters in an interview. “We do not need equity capital for now; we may need debt.”
Besides rupee-denominated debt, IIFL Finance will also explore the dollar-bond route and go for a public issue of bonds “at some point” later this financial year, Jain said.
As of June-end, more than 50% of IIFL Finance’s borrowings came from banks, while about 24% were from non-convertible debentures, data showed.
The company is aiming to reduce bank borrowing to under 50%, thereby diversifying its borrowing mix, Jain said.
“50-60% of our incremental borrowing mix may come from external commercial borrowings, dollar bonds, local bonds and other non-bank sources.”
The company is looking to recruit 3,000 to 4,000 people in the next three months, specifically for the gold loan business, Jain said.
But stung by its financial loss for the April-June quarter after the central bank’s ban, the company is also looking to diversify its loan products to minimise risks.
Jain said for its next leg of growth, IIFL Finance will also focus on loans against property, loans to medium and small enterprises and secured and unsecured business loans.
The company will also evaluate a proposal to list its mortgage and microfinance arms, Jain said.
($1 = 83.6440 Indian rupees)
Reuters
