IIFL Finance Sets Target To Raise Rs 20,000 Crore In FY24
IIFL Finance is looking to raise approximately Rs 20,000 crore in the fiscal year 2024 through different channels such as bank loans, bonds, and external commercial borrowings.
The funds raised will be used to repay existing liabilities, primarily from banks. Jain emphasized that the fundraising strategy is flexible to meet the company's diverse liability requirements.
As of March 31, IIFL Finance had a total borrowing of Rs 39,604 crore. The average cost of borrowing in the fiscal year 2023 was 8.8 per cent, and the company expects it to remain the same in the current year.
Jain anticipates loan disbursals of around Rs 15,000-16,000 crore in the current fiscal year, targeting a net interest margin of 6-7 per cent. In the fiscal year 2023, the average portfolio yield stood at 16.6 per cent.
Over the next two years, the company aims to increase its return on assets from 3.3 per cent (as of March 31) to approximately 4 per cent. Jain explained that the previous expansion of the branch network had elevated the cost-to-income ratio. However, the focus now is to enhance the productivity of existing branches rather than expanding further, thereby reducing the cost-to-income ratio.
IIFL Finance continues to prioritize gold loans, home loans, digital business loans, and microfinance loans. Jain believes that these segments alone can deliver the targeted 25 per cent growth, eliminating the need to explore other avenues at this time.
The company currently has sufficient capital and has no immediate plans for an initial public offering. It intends to maintain its focus on affordable housing, with the current emphasis on ticket sizes of Rs 15 lakh. There may be a slight shift towards Rs 20 lakh ticket sizes in the future, but no significant changes are expected, according to Jain.
