is planning to open 700 branches in India’s small cities and towns this fiscal year, defying a popular perception that the pandemic has crippled the brick-and-mortar business model. The non-banking finance company will likely hire about 5,000 people to run these branches. The retail-focused lender obtained approval from the Reserve Bank of India for the new branches.
By the end of the fiscal year in March 2022, IIFL Finance will have about 3,300 branches, as it aims to expand its services to a larger number of people who do not have easy access to credit. “Local presence is a huge boost to customers’ trust and helps better collection,” chairman Nirmal Jain said. “Despite being at the forefront of technology, we continue to invest in the physical network of branches for local storage of gold, so that loan disbursement and release of collateral can be done in a few minutes.”
In the past one year, IIFL Finance has been focussing on retail small-ticket loans delivered digitally. It has also partnered with banks and fin-tech firms for co-lending opportunities. The lender has a loan book of Rs 45,000 crore, of which 91% is retail credit. The company is in the process of transferring its real estate assets to Ares SSG Capital Management through an alternative investment fund (AIF) structure.
The AIF will hold about Rs 3,600 crore of assets. IIFL Finance provides gold and business loans to more than 60 lakh customers. In the last financial year, its net profit rose 39% to an all-time high of Rs 1,000 crore, beating the pandemic blues as low-cost housing and gold loans aided the lender’s earnings. Local ratings firm Crisil has revised its outlook on IIFL Finance to ‘stable’ from ‘negative’ earlier. The company is graded as AA (Stable).
“The overall rating continues to reflect the IIFL Finance group’s diversified retail product offerings with majority of the portfolio towards inherently less risky asset classes, the extensive branch network and adequate capitalisation,” Crisil said in a note. On Wednesday, the Capital Group, which manages over $2 trillion of assets, bought an about 2% stake and Sunil Singhania’s Abakkus Fund acquired another about 0.5% in the company through bulk deals.Internet Explorer Channel Network