IIFL Finance, a prominent non-banking financial company (NBFC), announced on Wednesday that its board has unanimously approved a rights issue to raise up to ₹1,500 crore in capital. This decision comes despite recent regulatory restrictions imposed by the Reserve Bank of India (RBI), prohibiting the NBFC from approving or disbursing gold loans.
In a regulatory filing, IIFL Finance disclosed that the board’s approval includes raising funds not exceeding ₹1,500 crore through the issuance of shares on a rights basis to its existing eligible shareholders as of the record date, which will be determined in due course, in compliance with relevant regulations.
Furthermore, during its meeting held on Wednesday, the board also greenlit a proposal to raise funds up to ₹500 crore through the issuance of non-convertible debentures on a private placement basis.
This strategic move by IIFL Finance underscores the company’s commitment to strengthening its financial position and capital base, despite the challenges posed by regulatory constraints in the gold loan segment. The decision to pursue a rights issue and private placement of debentures highlights the company’s proactive approach towards capital-raising initiatives aimed at supporting its growth trajectory and meeting its strategic objectives.
While navigating through regulatory headwinds, IIFL Finance remains focused on prudent financial management and value creation for its stakeholders. The board’s approval of these fundraising measures reflects confidence in the company’s long-term prospects and its ability to overcome near-term challenges, positioning it well for sustained growth and resilience in the dynamic financial services landscape.