IIFL Finance raises USD 175 mn via ECB route from HSBC, Union Bank, BoB

Mumbai: Non-banking finance company IIFL Finance has raised USD 175 million through external commercial borrowing (ECB) route.

IIFL Finance said it has raised USD 75 million from HSBC and USD 50 million each from Union Bank's Sydney branch and Bank of Baroda's IFSC unit.

With this debt raising, IIFL Finance has raised USD 275 million in ECB since March this year when it had mopped up 100 million from the Export Development Canada and Deutsche Bank Singapore.

These funds are long-term in nature and will help the company further strengthen its asset liability position and support growth, besides helping diversify its borrowing sources and lower the company's overall borrowing costs, Kapish Jain, the group CFO said.

The money has been priced at SOFR (secured overnight financing rate) plus 200 bps, IIFL Finance said in a statement.

The main difference between SOFR and Libor is how the rates are arrived at. While Libor is based on a panel bank input, SOFR is a broad measure of the cost of borrowing overnight collateralized by US treasury securities in the repo market.

IIFL Finance operates over 4,000 branches and serves around 85 lakh customers and offers home loans, gold loans, digital loans and micro finance loans.

Its loan book stood at Rs 64,638 crore as of March 2023 and 95 per cent of the loan book is retail.

In April, IIFL Finance, had repaid USD 400 million along with interests it had raised through a maiden dollar bond issue in February 2020.

It closed FY23 with a net income of Rs 1,607.5 crore, which was 35 per cent more than the previous year. Its gross NPA stood at 1.8 per cent and net NPA at 1.1 per cent.