Shares of IIFL Finance soared 12% in early trading on Friday after the company announced that the Reserve Bank of India (RBI) had lifted restrictions on its gold loan business. The stock surged 12.33%, reaching Rs 555.25, up from the previous close of Rs 494.30. The company’s market capitalization climbed to Rs 22,972 crore.
RBI Lifts Gold Loan Business Restrictions
The RBI’s decision, effective immediately, allows IIFL Finance to resume all operations related to its gold loan business, including sanctioning, disbursing, assigning, securitizing, and selling gold loans, in compliance with all applicable laws and regulations.
These restrictions were initially imposed on March 4, 2024, preventing the firm from engaging in these activities.
Company’s Commitment to Compliance
In response to the RBI’s latest decision, IIFL Finance emphasized its dedication to maintaining high compliance standards and ensuring that the corrective actions taken since the restrictions were imposed are sustained going forward.
Impact on Gold Loan Business
Since the restrictions in March, the assets under management (AUM) in IIFL’s gold loan business more than halved, falling to Rs 12,162 crore as of August 5. The original restrictions followed an RBI inspection of the company’s financial position as of March 31, 2023.
High Trading Volume
The announcement triggered a spike in trading activity, with 1.13 million shares of IIFL Finance changing hands in a block trade during the session.
Stock Performance in last one year
IIFL Finance shares have delivered mixed returns over various time frames. In the past month, the stock showed a positive return of 18.03%, indicating short-term growth. Over the last six months, performance was even more impressive, with a substantial increase of 61.28%, reflecting the stock’s resilience and upward momentum.
However, year-to-date figures were challenging, with the stock experiencing a negative return of 9.25%, indicating a period of decline. This downward trend persisted, as the share price fell by 8.01% over the last year.
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