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IIFL Finance Ltd.

BSE: 532636 Sector: Financials
NSE: IIFL ISIN Code: INE530B01024
BSE 15:11 | 06 Dec 322.20 -5.20
(-1.59%)
OPEN

334.85

HIGH

337.40

LOW

318.45

NSE 15:04 | 06 Dec 318.95 -7.55
(-2.31%)
OPEN

328.40

HIGH

337.35

LOW

318.70

OPEN 334.85
PREVIOUS CLOSE 327.40
VOLUME 79355
52-Week high 375.05
52-Week low 100.50
P/E 21.31
Mkt Cap.(Rs cr) 12,221
Buy Price 321.10
Buy Qty 1.00
Sell Price 322.20
Sell Qty 151.00
OPEN 334.85
CLOSE 327.40
VOLUME 79355
52-Week high 375.05
52-Week low 100.50
P/E 21.31
Mkt Cap.(Rs cr) 12,221
Buy Price 321.10
Buy Qty 1.00
Sell Price 322.20
Sell Qty 151.00

IIFL Finance Ltd. (IIFL) - Chairman Speech

Company chairman speech

From the Chairman's Desk

COLLABORATED WITH THE COUNTRY'S REPUTED BANKS FOR CO-LENDING AND LOAN ASSIGNMENTS ANDPARTNERED WITH SEVERAL FINTECHS AS WELL. OUR STRONG FOCUS ON RETAIL LENDING CONSERVATIVEPROVISIONING AND FUND RAISING POSITIONS US WELL WITH A SOLID BALANCE SHEET AND AMPLELIQUIDITY.

• Dear Shareholders

Our theme for this year's annual report - 'Small Loans for Big Dreams' - captures thepurpose of your Company's business. Your Company serves millions of small and very smallbusinesses looking for funds to grow and households aspiring to own the roof above theirfamilies. These millions of Indians aspiring for better lives and higher income do notneed large loans. Their big dreams come to reality by small dots of finance. YourCompany's small-ticket retail loans in the home gold business and microfinance loansegments are affordable and accessible. It has constantly endeavoured to reach the massesand fulfil their financial needs. Currently over 90% of our loans are granular and retailin nature.

Your Company's strategy to make small loans as the cornerstone for sustainable growthis driven by its unique position in the industry. It has invested heavily over the yearsto be at the forefront of cutting edge digital technology as well as have a widespreadphysical network of branches. Digital technology and distribution reach are key to successin the businesses of small dots. These small dots spread the risk and when joinedtogether complete the big picture for all the stakeholders. Our success is driven by ourreach and penetration. Further successful large banks are contributing to our financialinclusion mission. Last year all of us bore the brunt of havoc caused by the COVID-19pandemic. The second wave brisk and brutal is spreading into the current year as well. Imust mention how incredibly proud my team makes me for their undeterred dedication andindomitable commitment during the tough times. Their strong resolve ensured uninterruptedcustomer service while they continued managing their challenges at home.

Against this backdrop your Company exhibited a steady performance by deliveringfinancial inclusion to the masses and a superior return on capital to all thestakeholders. Your Company's post-tax profit made a new high of Rs. 7365 million. Whenfaced with uncertain and volatile business environment we got even more focussed on ourcore values. We took the approach of 'Seedhi Baat' and helped customers to make the mostof the Government support. Besides our employees also had clear direction to showcompassion and flexibility to the customers. We adhered to traditional tenets of financialprudence risk mitigation strong balance sheet adequate liquidity and costrationalisation.

Economy Shows Resilience and Propensity to Bounce Back

Our Government and the Reserve Bank of India (RBI) proactively initiated a set ofmeasures and supply- side reforms to lend flexibility resilience and stimulate theeconomy. There were decisive signs of 'V-shaped' recovery visible in the economy with theresurgence of consumer confidence robust financial markets and an uptick inmanufacturing and exports. The Union Budget provided a significant increase in the outlayfor capital expenditure infrastructure and healthcare making the targeted 11% GDPgrowth in FY22 quite achievable. The decisive Budget reforms are expected to provide theeconomy with imperative growth momentum. With the economy's recovery we anticipate arobust demand for credit especially for the MSME and affordable housing sectors. Theunexpected but incredibly rapid and ruinous second wave of COVID-19 has again posedchallenges for the economic growth this year. Time and again

Indian people policy makers and economy have showed resilience and tremendous abilityto bounce back. Your Company is in the optimists' camp and is betting on recovery andgrowth. From longer term perspective the underlying trends of digitisation andformalisation in the economy will further boost credit demand. I am confident about thetremendous opportunities that lie ahead as the sectors mentioned above primarily driveour business.

NBFCs have an important Role to Play

My reference to NBFCs (Non-Banking Finance Companies) include all regulated non-bankinglenders namely housing finance and micro finance companies. NBFCs have been witnessing avolatile liquidity situation since September 2018 further precipitated by the pandemic.There has been a massive perceived risk aversion. As a result over 90% of our loans aregranular and retail in nature. While industry houses backed NBFCs have easy access tofunds the standalone NBFCs have been dealing with liquidity squeeze.

Today banks enjoy access to a stable liability base and asset mix of large-ticketcorporate and retail focusing on the priority sector. However they are targeting toshift their balance sheet mix towards more retail assets rapidly. This shift is where theco-lending model has the potential to change our country's lending landscape entirely. Onthe one hand banks with adequate capital can leverage NBFCs' geographical reachservicing capabilities underwriting skills and trained workforce without having tocommit additional fiixed operating costs. NBFCs/HFCs on the other will require lowercapital for deployment and can improve liquidity and profiitability. Retail oriented NBFCslike your Company therefore have tremendous opportunity of forging win- win partnershipswith banks for sourcing retail and priority loan assets.

Growing responsibly and Sustainably

Our focus is on business growth along with creating value for all our stakeholders. Ourrobust governance and transparent processes have further helped deepen our stakeholderengagement through improved disclosures. Every member of your Company's Board is aluminary with impeccable track record. We have been fortunate to be guided by a verycompetent Board committed to highest standards of integrity transparency and fairness.Our social initiatives are lauded by peers as well as eminent people. Our housing fiinancecompany has taken the lead to innovate for building houses in sustainable manner i.e.without depleting natural resources and still at lower cost to make them affordable forIndian masses. We have published a book - Building Green - to freely share ourknowledge and learnings.

We strongly believe in creating a sustainable future.

Our efforts are consciously directed towards this goal through our EnvironmentalSocial and Governance (ESG) initiatives.

Way ahead

We continue to focus on retail lending delivered digitally. Our unwavering focus onrobust processes collection efficiency asset quality and customer delight has stood usin good stead and we shall sharpen it further.

As a strategy your Company has been partnering with the country's reputed banks forco-lending and loan assignments and partnered with several fiintechs as well. Thepartnership model will help us optimise capital achieve higher returns on equity andcontain risks associated with growth as well as liquidity.

The pandemic presented us with an opportunity to innovate at an exceptional speed. Itpushed us to set our priorities for the near and long-term future towards acceleratinginvestment in the latest technology across all our businesses.

We appreciate our stakeholders' unceasing support and are committed to do everything inour power to exceed their expectations every single time.

Best regards
Nirmal Jain
Chairman

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