IIFL Finance said that its Board of Directors has approved a rights issue of equity shares of Rs 1,272 crore at Rs 300 per equity share, which is a 29% discount to the last closing price, as per the company’s regulatory filing on April 17. 

The company will be offering one rights share for every nine shares held by the shareholders. The record date for the rights issue has been fixed as April 23. The rights issue period starts from April 30 and will continue until May 14. 

The new rights issue will give preferential treatment to existing shareholders. Following the issue, IIFL Finance will have 42,39,42,705 fully paid equity shares. This is subject to finalisation of the basis of allotment and assuming full subscription to the issue.

IIFL Finance is planning to raise capital, following the Reserve Bank of India’s (RBI) decision to prohibit it from granting gold loans due to “material supervisory concerns” in its portfolio. Fairfax India, the top shareholder in IIFL with a 15% stake, has pledged to provide up to USD 200 million (i.e. approximately Rs 1,673.20 crores) in liquidity to support the lender.

As of December 31, IIFL’s gold loans under management were Rs 24,692 crore, accounting for 32% of its total assets. The company’s stock has lost 30% of its value since the RBI’s decision.

Earlier, IIFL had announced plans to raise Rs 1,500 crore through a rights issue, but the final amount was not confirmed. 

IIFL Finance, is one of the leading financial services providers in India. It offers various loans and mortgages through its subsidiaries – IIFL Home Finance, IIFL Samasta Finance, and IIFL Open Fintech. 

These include home loans, gold loans, business loans, microfinance, and more. The company has a presence across the nation. With 2600+ branches in 500+ cities, catering to both retail and corporate clients.