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IIFL Finance has set its sights on raising approximately Rs 20,000 crore in FY24, according to Nirmal Jain, the managing director of the company. This substantial amount will be sourced through diverse avenues, including bank loans, bonds, and external commercial borrowings. Jain highlighted that a portion of these funds will be allocated towards the repayment of previous obligations, particularly those owed to banks. Jain further emphasized the dynamic nature of the fundraising plan, which aims to fulfill various liability obligations by renewing maturing loans and bonds.
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By the end of March 31, IIFL Finance had accumulated total borrowings amounting to 39,604 crore. Throughout FY23, the average cost of borrowing stood at 8.8%, and the company anticipates that this cost will remain unchanged in the current fiscal year.
Nirmal Jain has set several targets for the company. In the current fiscal year, Jain expects IIFL to disburse loans totaling around 15,000-16,000 crore. The company is also aiming for a net interest margin ranging from 6% to 7%. In FY23, the average portfolio yield was 16.6%.
IIFL Finance has further plans to enhance its return on assets, aiming for an increase from 3.3% as of March 31 to approximately 4% over the next two years. Jain stated that the company had previously expanded its branch network aggressively, leading to a higher cost-to-income ratio. However, the focus will now shift towards optimizing the productivity of existing branches instead of further expansion, which will ultimately help reduce the cost-to-income ratio.
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IIFL Finance maintains its focus on specific loan segments, namely gold loans, home loans, digital business loans, and microfinance loans. MD Nirmal Jain believes that these segments can achieve the targeted 25% growth, eliminating the need to explore other avenues at present.
Jain affirms that the company is well-capitalized, indicating no immediate plans for an initial public offering (IPO). The company intends to stay committed to affordable housing, with the current emphasis on a ticket size of 15 lakh, which may extend to 20 lakh in the future. However, Jain asserts that there will be no significant changes beyond this scope.
