IIFL Finance To Raise Rs 1,272 Cr Through Rights Issue Amidst RBI Ban On Gold Loans

IIFL Finance has unveiled plans to raise Rs 1,272 crore through a rights issue. Priced at Rs 300 per share, the issue presents a near-30 per cent discount to the prevailing market price.

This strategic move comes in the wake of the Reserve Bank of India's (RBI) recent prohibition on IIFL Finance from issuing gold loans, which took effect in March.

Shareholders of IIFL Finance are set to receive one share for every nine they currently hold. This initiative shows the company's proactive stance in bolstering its financial stability and resilience amid regulatory challenges. With nearly a third of its book comprising gold loans and assets under management exceeding 20,000 crore, IIFL Finance is navigating through a critical period with foresight and determination.

The rights issue, scheduled to commence on 30 April and conclude on 14 May, offers existing shareholders an opportunity to augment their holdings at a discounted rate. This discount, while indicative of the prevailing uncertainties surrounding the company's operations, serves as an enticing incentive for shareholders to participate in the fundraising exercise.

On 16 April, IIFL Finance witnessed a decline in its share price, experiencing a 2.35 per cent drop to Rs 421.7 per share. This downturn, occurring amidst the closure of Mumbai markets on Wednesday, reflects investor apprehensions regarding the impact of the RBI's ban on gold loans.