IIFL Finance plans to borrow Rs 1,500 crore.

The largest non-bank lender, IIFL Finance, is using the debt market to raise up to Rs 1,500 crore by selling NCDs, promising investors returns of up to 9%. The Prem Watsa-led Fairfax Holding-backed company said in a statement on Tuesday that the debt raising through a public issue will begin on June 9 and that the revenues will be utilized for capital augmentation and business growth.

Secured redeemable non-convertible debentures (NCDs) have a 60-month tenor and are offered at up to 9% interest. The first issue of these NCDs is for Rs 300 crore, with a green shoe option to retain up to Rs 1,200 crore in oversubscription for a total of Rs 1,500 crore.

The bonds are further offered in 24 and 36-month tenors. According to group chief financial officer Kapish Jain, the interest would be paid annually, on a maturity basis, with the option of being paid monthly for a 60-month term. In order to provide clients with a frictionless experience, the funds raised will also be used to speed up the company’s digital process transition.

It paid off USD 400 million in bonds that were issued in February 2020 in April. With 4,000 outlets, IIFL Finance is one of the biggest retail-focused financial services providers. In March 2023, it had a loan book worth Rs 64,638 crore, 95% of which was for retail loans.

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