IIFL Finance Announces Fundraise After RBI Action

IIFL Finance Announces Fundraise After RBI Action


India's IIFL Finance, a non-bank lender, is seeking to raise up to 20 billion rupees ($241.5 million) in fresh capital. This move comes after the Reserve Bank of India (RBI) barred IIFL from offering gold loans due to concerns about the company's gold loan portfolio.

To shore up its capital base, IIFL plans to raise 15 billion rupees through a rights issue of shares and the remaining 5 billion rupees through non-convertible debentures offered in a private placement. The RBI's action against gold loans, a key business segment for IIFL, resulted in a significant drop in the company's stock price, which has fallen roughly 35% since early March.

In an attempt to ease investor concerns about liquidity, IIFL's largest shareholder, Fairfax India, agreed to provide up to $200 million in support last week. Despite this, IIFL's stock price closed 3.3% lower on the day the fundraising announcement was made.


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