IIFL Finance's Global Triumph: JPY 7.5B Boost, Shares Hold 28% Rally Potential

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IIFL Finance's Global Triumph: JPY 7.5B Boost, Shares Hold 28% Rally Potential
Credit: © Reuters.

By Aayush Khanna

IIFL Finance's (NS: IIFL ) recent achievement in securing JPY 7.5 billion through its inaugural Japanese Yen-denominated external commercial borrowing (ECB) facility signals a strategic move towards global diversification and growth. Facilitated by Mizuho Bank's Singapore branch, this milestone underscores the growing international acceptance of IIFL Finance's credit.

The funds, acquired at competitive pricing over TONAR, mark a pivotal step in strengthening IIFL Finance's borrowing profile. Joint Managing Director, Mr. R Venkataraman, highlights the significance of partnering with esteemed institutions like Mizuho Bank, emphasizing the NBFC's commitment to diversifying borrowing options for sustained growth.

For the first time, accessing JPY funding introduces geographic diversity and cost efficiency to IIFL Finance's funding profile, according to Group CFO, Mr. Kapish Jain. This long-term facility is anticipated to fortify the Asset Liability position.

Mizuho Bank's Senior Managing Director, Mr. Piyush Agarwal, expressed satisfaction in arranging the inaugural Japanese Yen-denominated ECB facility for IIFL Finance, foreseeing benefits in diversifying lender base and borrowing currency.

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As of September 2023, IIFL Finance maintains a robust financial position with free cash and undrawn lines totaling INR 9,078 crore at the consolidated level, ensuring ample liquidity to meet long-term commitments.

In addition to these financial strides, the shares of IIFL Finance appear undervalued, with a fair intrinsic value of INR 788, depicting a promising 28% potential rally from the current market price of INR 612. The stock is gaining traction on investors' radar, having delivered a commendable 34% return in the last 12 months, further emphasizing its growth prospects and market appeal.

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