7 Jul 2021

IIFL Home Finance public debt issue analysis

The base size of Rs. 1 billion with an option to retain oversubscription to the tune of Rs. 9 billion making the overall issue size of Rs. 10 billion. These NCDs are unsecured subordinated redeemable non-convertible debentures of the face value of Rs. 1000 each. The issue opens for subscription on July 06, 2021 and will close on or before July 28, 2021. Post allotment, NCDs will be listed on BSE and NSE.

author dp
Team INRBonds
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IIFL Home Finance is a wholly owned subsidiary of India Infoline Finance(IIFL Finance) and is registered with National Housing Bank (NHB) as a housing finance company (HFC). The company’s area of operation includes low ticket home loans, loan against property (LAP) and corporate mortgage loans (lower ticket developer funding). Currently company is offering public debt issue.

Issue Detail

The base size of Rs. 1 billion with an option to retain oversubscription to the tune of Rs. 9 billion making the overall issue size of Rs. 10 billion. These NCDs are unsecured subordinated redeemable non-convertible debentures of the face value of Rs. 1000 each. The issue opens for subscription on July 06, 2021 and will close on or before July 28, 2021. Post allotment, NCDs will be listed on BSE and NSE.

These NCDs are rated as AA/Stable by CRISIL Ratings Ltd. and AA+/Stable by Brick Work Ratings India Pvt.                                                                                                                                             

 

Series 1

Series 2

Series 3

Frequency of Interest Payment

Annual

Monthly

At Maturity

Nature

Unsecured

Unsecured

Unsecured

Tenor

87 months

87 months

87 months

Coupon Rate

10%

9.60%

NA

Effective Yield (% per Annum)

10%

10.03%

10.02%

Amount on Maturity

Rs 1,000

Rs 1,000

Rs 2,000

 

IIFL Home Finance Ltd financials

Parameters(Rs billion)

FY19

FY20

FY21

Total income

18.28

17.75

20.68

Net Income

3.06

2.45

4.01

Asset Under Management(AUM)

181.58

184.95

206.94

Net Worth

15.97

18

21.46

Total Debt

123.01

123.45

130.1

CRAR(%)

21.02

23.71

23.00

GNPA(%)

0.88

1.6

1.96

NNPA(%)

0.67

1.22

1.23

Leverage

7.7

6.63

6.06

NIM(%)

3.79

4.22

5.05

Established parentage support- Being a subsidiary of IIFL, it has got the benefit of a reputed brand name in its market segment. In addition to it, it receives significant benefit in terms of business strategy and managerial experience.

Operational efficiency- The company has demonstrated its operational ability in recent past. This evident from its growth of 16.50% in total income in FY21 on yearly basis. Net profit rose significantly by 64% on yearly basis in FY21. Asset under management (AUM) rose by 12% to Rs 207 billion as of 31st March 21 from Rs 185 billion as of 31st March 20.

Adequate capitalization-Its net worth rose to Rs 21.46 billion as of 31st March 21 from Rs 18 billion as of 31st March 2020. Consequently, its capital adequacy remained stable at 23% as of 31st March 2021 from 23.71% as of 31st March 2020.

 Leverage- As of FY21, company’s leverage stood at 6.06 from 7.7 in FY19 despite increase in debt outstanding. This can be attributed to rise in equity capital.

Weakening asset quality-Owing to covid pandemic, company’s asset quality has witnessed degradation. Its gross NPA rose to 1.96 as of FY21 from 1.6 in previous fiscal year.   

IIFL Finance Ltd

IIFL Finance Limited (formerly known as IIFL Holdings Ltd.) was formed in 2004. IIFL Finance is a Systemically Important - Non Deposit taking systematically important, non-deposit accepting non-banking financial company (NBFC-ND-SI). Its area of operation includes home loans, gold loans, business loans including loans against property and medium and small enterprise financing, microfinance, construction and real estate finance, and capital market finance. It finances both retail and corporate segment.

IIFL Finance has been rated as AA/Negative by CRISIL Limited and AA+/ Negative by Brickworks Ratings India Private Limited.

Financials of IIFL Finance

Parameters(Rs billion)

FY19

FY20

FY21

Total income

50.85

48.2

59.89

NII

19.24

16.38

21.01

Net Income

7.96

5.03

7.61

Asset Under Management(AUM)

349.03

379.51

446.88

Net Worth

43.59

47.66

53.93

Total Debt

265.17

269.83

322.56

CRAR(%)

18.26

17.55

25.4

GNPA(%)

1.96

2.31

2.15

NNPA(%)

0.63

0.97

0.97

Leverage

6.08

5.66

5.98

NIM

6.4

6.4

6.8