IIFL Finance Ltd is a diversified NBFC in India engaged in the business of loans and mortgages along with its subsidiaries. It offers a wide spectrum of products such as Home loan, Gold loan, business loan, microfinance, capital market finance, and developer & construction finance, etc. The company has established itself as a significant player in India's financial services sector, serving primarily the underserved and underbanked segments of the population.
IIFL Finance is a first generation venture which started as a research firm in 1995. IIFL Finance Limited was a pioneer in the retail equity broking industry with its launch of 5paisa trading platform which offered the lowest brokerage in the industry and freedom from traditional ways of transacting. IIFL's evolution from an entrepreneurial start-up in 1995 to a full range diversified financial services group is a story of steady growth by adapting to the dynamic business environment, without losing focus on its core domain of financial services.
The company underwent significant corporate restructuring in recent years. The Board of Directors of IIFL Finance Limited at its meeting held on January 31, 2018, had approved the reorganization of the IIFL Group, which resulted into two listed entities – IIFL Finance and IIFL Securities. The merger of India Infoline Finance Limited with IIFL Finance Limited became effective from March 30, 2020.
IIFL Finance demonstrates substantial scale in its operations. As of FY24, the total AUM stood at Rs. ~76,700 Crore in FY24 vs Rs. ~37,900 Crore in FY20. This represents more than doubling of assets under management over a four-year period, indicating strong growth momentum.
The company's latest financial performance shows some challenges. IIFL Finance Ltd's consolidated net profit declined by 41.62% to ₹251.36 Crore in the quarter ended March 2024 (Q4 FY25), owing to a drop in revenues and a rise in impairment costs. The company had posted a consolidated net profit of ₹430.63 Crore in the same quarter a year ago (Q4 FY24). For the full financial year FY25, consolidated net profit fell sharply to ₹578.16 Crore, compared to ₹1,974.22 Crore in FY24.
However, management remains optimistic about the turnaround. "Q4 marks a decisive turnaround with consistent growth across key performance indicators. Gold loans have rebounded strongly post-embargo, and MSME lending continues its steady expansion. Asset quality has improved, with GNPA declining to 2.2%. Backed by a focused digital strategy, the potential to recapture lost business, and a favorable credit environment, we are confident of sustaining and accelerating momentum into FY26."
IIFL Finance has a market capitalization of ₹20,178 Crore (as of recent data), positioning it as a mid-cap financial services company in the Indian market. The company trades on both NSE and BSE, providing adequate liquidity for investors.
IIFL Finance has built an extensive distribution network across India. The company operates ~4,800 branches in FY24 vs ~2,300 branches in FY20. It has a customer base of over 80 lakh customers. This widespread presence enables the company to serve customers across urban and rural markets effectively.
The company's diversified product suite addresses various financial needs. IIFL Finance offers diverse product spectrum comprises home loans, gold loans, business loans including loans against property and MSME financing, microfinance, construction and real estate, and capital markets finance. The company provides a comprehensive range of products including home loans, gold loans, business loans, microfinance, capital market finance, developer and construction finance.
IIFL Finance operates in markets with significant growth potential. Demand for credit is high in underpenetrated low & middle income population. Affordable housing (usually 5-25 Lakh ticket size) credit for low income group, this segment has estimated shortage 100 million units in 2022 as compared to 25 million units in FY07, where in 95% of the housing shortage is expected to be in EWS and LIG segment. Credit demand in this segment is expected to be ₹23.7 Lakh Crore.
The gold loan segment presents particularly attractive opportunities. As of FY23, Indian households possess 14% (28,000 tonnes) of the world's gold, in terms of value, India's share amounts to ₹130 trillion, with ₹85 trillion attributed to jewellery. However, only approximately 20% of this gold is pledged as collateral. The unorganized sector has a stronghold on the majority share of 65%, while the remaining 35% is managed by organized players such as banks and non-banking financial companies (NBFCs). With the current organized market operating at a mere 7% of the total gold holdings, even a marginal increase of 1% in penetration could result in approximately 15% growth for the entire organized segment.
IIFL Finance employs an innovative capital-light business model. IIFL has created a significant portion of loan book off its book, 39% of its AUM. It does this by securitizing, assignment, or co-lending these loans to different financial institutions. Usually, firms sell their loans to different banks/NBFCs to raise funds, by providing a yield to these buyers of loans. This model allows it to grow its book faster, without having to raise equity for the same.
The company has recently strengthened its board with experienced leadership. IIFL Finance Limited has informed the Exchanges regarding Press Release dated June 16, 2025, titled- Former RBI Deputy Governor Shri B.P. Kanungo Joins Board of IIFL Finance. The Company has informed the exchanges regarding appointment of Mr. Bibhu Prasad Kanungo as Additional Non-Executive Independent Director w.e.f. June 16, 2025.
Promoter Holding: 24.9% as of March 2025, indicating strong promoter commitment while maintaining adequate public float. Revenue: ₹2,594.35 Crore as on March 2025 (Q4 FY25). Net Profit: ₹251.36 Crore as on March 2025 (Q4 FY25).
The company's recent fundraising initiatives demonstrate its growth ambitions. IIFL Finance Board Approves ₹10,000 Crore Fundraising - May 8, 2025. IIFL Finance reported a significant decline in net sales and profits for March 2025. The Board approved a fundraising plan of up to ₹10,000 Crore.
Looking ahead, IIFL Finance is positioned for recovery and growth. Jefferies reports IIFL Finance's earnings are set to recover post-FY25 trough, with a significant rebound in gold loans and projected AUM growth of 18-20%. The company anticipates 25-30% growth in gold loans for FY26.
The company's focus on digital transformation and regulatory compliance positions it well for sustainable growth. "Backed by a focused digital strategy, the potential to recapture lost business, and a favorable credit environment, we are confident of sustaining and accelerating momentum into FY26. We remain firmly committed to ensuring that our governance is anchored in rigorous risk monitoring, transparent disclosures, and a zero-tolerance approach to non-compliance - striving not just to meet but to stay ahead of evolving regulatory standards."
IIFL Finance represents a compelling investment opportunity in India's growing financial services sector, with its diversified product portfolio, extensive distribution network, and innovative business model positioning it to capitalize on the country's expanding credit demand among underserved segments.
