IIFL Finance raises $50m in ECB facility from Japan’s Mizuho Bank

IIFL Finance, one of India’s leading non-banking finance companies (NBFC), has successfully raised JPY 7.5 billion (equivalent to US$50 million) through an external commercial borrowing (ECB) route. This transaction marks a significant inaugural JPY denominated facility for the NBFC, sourced from Mizuho Bank’s Singapore branch.

Competitive Pricing and Financial Strength

The funds were secured at competitive pricing over the Tokyo Overnight Average Rate (TONAR), reflecting IIFL Finance’s robust financial standing. As of September 2023, the company holds Rs 9,078 crores in free cash and undrawn lines, ensuring a strong liquidity buffer for long-term commitments.

Diverse Portfolio and Strong Market Presence

IIFL Finance, with over 4,400 branches and 85 lac customers, specializes in various core business segments such as home loans, gold loans, digital loans, and microfinance, primarily targeting the unbanked and underbanked demographic. The company’s asset quality is impressive, with a Gross NPA of 1.84% and Net NPA of 1.02%.

Mizuho Bank Funds IIFL Finance with JPY 7.5 Billion ECB, Enhancing India’s NBFC Sector

Positive Ratings and Recent Financial Activities

Leading rating agency CRISIL revised IIFL Finance’s outlook to ‘Positive’ and reaffirmed its long-term rating at ‘CRISIL AA’. Furthermore, Moody’s upgraded IIFL Finance’s international credit ratings in April. IIFL Finance’s prudent financial activities include the repayment of a $400 million dollar bond issue in April 2023 and raising $175 million through ECB in June 2023, which involved HSBC, Union Bank (Sydney), and Bank of Baroda (IFSC unit). In March 2023, the company raised an additional $100 million through ECB, including funding from Export Development Canada and Deutsche Bank (Singapore).

R Venkataraman and Piyush Agarwal’s Statements

R Venkataraman, Joint Managing Director of IIFL Finance Limited, highlighted this as a significant milestone, acknowledging Mizuho Bank’s role in supporting IIFL Finance’s growth. Piyush Agarwal, Senior Managing Director at Mizuho Bank, expressed satisfaction in arranging the facility and confidence in IIFL Finance’s growth trajectory.

This development signifies a robust phase for IIFL Finance, enhancing its global credit acceptability and financial diversification.