IIFL Finance Launches ₹500 Crore NCD Issue

IIFL Finance has rolled out a new public issue of secured, rated, listed non-convertible debentures (NCDs) to raise up to ₹500 crore. The issue opens on April 7, 2025, and will close on April 23, 2025. Investors looking for fixed-income investment opportunities can now consider this high-yielding offering, which comes with credit ratings from two of India’s leading agencies and multiple payout and tenor options.

Issue Structure and Details

IIFL Finance structured the NCD issue with a base size of ₹100 crore and added a green shoe option of up to ₹400 crore, taking the total issue size to ₹500 crore. Investors will subscribe to the NCDs at a face value of ₹1,000 per unit. The minimum application amount stands at ₹10,000, meaning each investor must apply for at least ten NCDs.

IIFL will allot the NCDs on a first-come, first-served basis, which encourages early applications, especially from retail and high-net-worth individuals seeking attractive fixed returns.

Coupon Rates and Tenor Options

Investors can choose from four different tenors—15, 24, 36, or 60 months. Each tenor comes with specific interest payout options, including:

• Monthly

• Annual

• Cumulative (at maturity)

The highest effective yield of 10.24% per annum appears under Series IX, which carries a 60-month tenor and a cumulative payout structure. IIFL has designed this NCD issue to cater to various investor preferences by offering flexibility in both interest payment frequency and maturity duration.

Credit Ratings and Risk Profile

CRISIL and ICRA assigned the NCDs a credit rating of “AA/Stable”, which indicates high safety regarding timely interest and principal repayment. These ratings reflect IIFL Finance’s strong track record, sound asset quality, and stable earnings profile. The “Stable” outlook further implies that rating agencies expect the company’s financial performance to remain consistent over the near-to-medium term.

By securing high credit ratings from both agencies, IIFL has assured investors about the low credit risk associated with this NCD offering.

Listing and Liquidity

IIFL Finance will list the NCDs on both the BSE and NSE, with the NSE acting as the designated stock exchange. This listing ensures liquidity for investors who may choose to sell their NCDs before maturity in the secondary market.

Investors often look for listed NCDs because they provide a blend of fixed returns and potential liquidity—an advantage over many traditional fixed-income instruments.

Use of Proceeds

IIFL plans to use the funds raised from the NCD issue for three primary purposes:

1. Onward Lending: The company will deploy capital to expand its loan book across key segments.

2. Financing Activities: The funds will support the company’s core business model of providing loans to individuals and MSMEs.

3. General Corporate Purposes: IIFL may also use a portion of the proceeds for strengthening its operational infrastructure and other business needs.

By channeling the funds into business growth and lending operations, IIFL aims to boost its revenue while keeping the interests of debenture holders secured through the structure of the NCDs.

Company Profile: IIFL Finance

IIFL Finance operates as a Non-Banking Financial Company (NBFC) under the Middle Layer as per RBI classification. The company holds a diverse lending portfolio that includes:

• Home Loans

• Gold Loans

• MSME Loans

• Microfinance

• Personal Loans

• Business Loans

As of December 31, 2024, IIFL Finance reported assets under management (AUM) of ₹71,410.19 crore. With a network of 4,858 branches across India, the company has established a strong presence in both urban and rural markets. The wide reach gives IIFL an edge in targeting varied customer segments across geographies.

IIFL focuses on leveraging digital platforms alongside physical branches to deliver seamless credit services, making it a key player in India’s NBFC sector.

Lead Managers and Investment Channels

IIFL appointed Trust Investment Advisors, Nuvama Wealth Management, and IIFL Capital Services as the lead managers for this public issue. These institutions will manage subscriptions, investor relations, and the overall distribution process.

Retail investors can subscribe through online brokerage platforms, bank channels, and wealth advisors affiliated with the lead managers.

Investor Considerations

This NCD issue stands out in today’s investment environment for several reasons:

• Attractive Yields: With a maximum effective yield of 10.24% per annum, IIFL’s NCDs offer better returns than traditional fixed deposits.

• Credible Ratings: “AA/Stable” from CRISIL and ICRA assures safety.

• Flexible Options: Investors can choose from multiple tenors and payout structures based on their financial goals.

• Liquidity: Listing on both NSE and BSE ensures an exit option before maturity.

• Minimum Investment Threshold: With a ₹10,000 minimum application size, the issue remains accessible for small investors as well.

Key Facts at a Glance

Conclusion

IIFL Finance has created an attractive NCD offering for income-focused investors. With strong credit ratings, high returns, and flexible investment options, the NCD issue offers a compelling alternative to fixed deposits and bonds with lower yields. The company’s robust AUM, wide branch network, and diversified loan portfolio further strengthen its credibility.

As investors search for higher returns amid volatile market conditions, fixed-income instruments like these NCDs can offer stability and predictable cash flows. Those willing to lock in funds for medium to long durations can consider participating in this issue, especially early on, to secure their spot under the first-come, first-served allotment method.

IIFL’s reputation as a well-managed NBFC adds to the trust factor, making this NCD issue a noteworthy opportunity in India’s debt investment space.