IIFL Finance is planning to increase its share of external commercial borrowings (ECBs) as part of diversification of funding sources.
“I think there is certainly an option (for ECBs). ECBs and foreign currency borrowings are about 12-13% now, we can take it up to 20% next year. We will be raising a good amount of ECB in next few months,” Managing Director Nirmal Jain said in a press conference. He did not specify the amount to be raised through ECBs.
The RBI has proposed major liberalisation in the ECB framework. Under the proposed guidelines, companies can raise ECBs of up to $1 billion or 300% of net worth, whichever is higher, compared to the prior $750-million annual cap. The RBI has allowed market-determined interest rates, eliminating cost caps.
IIFL Finance’s total borrowing stood at Rs 60,640 crore as of December. Bank loan at 41% dominates the funding mix, compared to 35% in FY25. Borrowing via debentures constituted 31% of the mix.
Banks have not cut marginal cost of funds based lending rate much yet, so transmission has been limited, Jain said. “We expect transmission of 50-60 bps in the next quarter.”
IIFL Finance on Monday launched a public bond issue thorough which it plans to raise up to Rs 2,000 crore. The issue will open on Tuesday and offers effective yields of 8.70%-9.00% per annum.