A subsidiary of IIFL Holdings Limited, India Infoline Finance Ltd. (IIFL Finance) is a systemically important non-deposit accepting non-banking finance company. It is one of the largest and most diversified non-banking finance companies in India. The IIFL Group was founded over two decades ago. The NBFC arm was initially incorporated in the year 2004 as India Infoline Investment Services Private Limited and converted into a Public Limited Company in the year 2007. Now, it is known as India Infoline Finance or IIFL Finance. In terms of share of business and profitability, IIFL Finance is the largest entity in the IIFL Group. It will be soon listed as a separate entity on the exchanges as part of the Scheme of Reorganization of the IIFL Group
The Absolute IIFL Finance
IIFL Finance is engaged in the business of home loans, loans against property, gold loans, SME finance, capital market finance and microfinance loans. It offers smallticket loan products to retail borrowers, delivered through a pan India branch network. IIFL Finance has over 1,900 branches and digital channels. The company had loan Assets Under Management (AUM) in excess of Rs. 34,904 crores at the end of March 2019. The capital adequacy ratio near twenty per cent is well above the minimum requirement. About eighty-five per cent of its loans are retail in nature and close to fifty per cent is priority sector lending compliant. IIFL Finance has a long-term credit rating of AA (Stable) by Crisil, AA (Stable) by ICRA and AA (Positive) by CARE.
The parent, IIFL Group has a customer base of over four million across eight countries. The NBFC operation has branches mostly in smaller towns and rural locations. The wealth business manages and advises about Rs. 170,000 crores of assets. IIFL Institutional Equities caters to over 400 global funds.
Over the years, IIFL forayed into life insurance & mutual fund distribution, institutional equities business, consumer finance business and wealth management businesses. IIFL also expanded globally and has regulated subsidiaries in eight major global financial centers.
Leader in digital finance
We are living in an era where digitalization is revolutionizing finance space in an amazing way. Digitalization is core to IIFL Finance’s way of working. The company offers end-to-end customer journey on digital platform. The loan origination happens through its in-house app on a tablet followed by underwriting processes, which also heavily use digital tools, thereby automating the decision making and reducing human interaction. Being an innovator and early adopter of digital transformation, IIFL Finance is able to offer a 22 minute end-to-end loan processing turn-around time for gold loans. This is one of the fastest and most advanced loan experiences offered by any NBFC in India.
All of its customer touch points are digitally enabled bringing huge efficiencies to company’s businesses and help them provide frictionless services to customers. A large part of company’s new customer acquisition is through digital mode. It is also introducing chatbots to help its customer service team to provide better experience to customers. Also, IIFL is investing into robotic process automation to digitize legacy systems and processes. The company’s digital analytics team uses machine learning models to design credit policy decisions accurately. It also helps to reduce risk by providing early warning on possible delinquencies.
In addition, the company has partnered with some of India’s most innovative fin-tech companies and leverage their expertise to provide best-in-class customer experience and meet expectations of the millennial customers, who prefer do-it-yourself mode of loan processing.
About the CEO
Sumit Bali, the CEO and Executive Director of IIFL Finance, is a seasoned banker carrying vast experience in the Indian corporate sector. He holds a PGDM from IIM Ahmedabad and B.A (Hon) from St. Stephen’s College, New Delhi. Prior to his current role, Sumit has spent over two decades with the Kotak Group. His last position at Kotak Mahindra Bank was of Senior Executive Vice President, overseeing consumer banking retail asset products including home loans, loan against property, credit cards, salaried personnel loans, and SME loans. Previously, he also held the position of CEO of Kotak Mahindra Prime Ltd. (KMPL) and also was a Director on KMPL’s Board. He began his career with Glaxo India Limited in the year 1990 and has also worked with Asian Paints (I) Ltd.
The Legendary Founder
Nirmal Jain is the Founder and Chairman of IIFL Group. He is a first generation entrepreneur, who is credited with building one of the largest financial services groups in India in just about two decades. He is a PGDM (Post Graduate Diploma in Management) from IIM, Ahmedabad, a rank holder Chartered Accountant, and a Cost Accountant.
Nirmal Jain began his career in the year 1989 with Hindustan Lever Limited (HUL), the Indian arm of Unilever. After a few years, in the year 1995, he founded his own equity research company, which is today known as India Infoline or IIFL Group. The company’s pioneering work in equity research had set new standards. Further, in the year 1999, he launched the website www.indiainfoline.com where he made available his research free on the Internet. Finally, in the year 2000, the company forayed into the transaction space, with the launch of the online trading portal. Under his leadership, the company started diversifying the business model by adding multiple business streams while remaining focused on the core domain of financial services.
Under Nirmal Jain’s visionary direction, today IIFL is one of the largest financial services firms in India backed by marquee global investors like Fairfax Group, private equity major General Atlantic, and the UK government’s private equity fund – CDC Group. Nirmal Jain has successfully steered IIFL to reach the epitome of success and stands amongst India’s leading financial services groups.
NBFC is Important!
The profound team at IIFL has shared their views on NBFC as follows. In FY18, NBFCs accounted for more than a third of incremental credit. Broadly, PSU banks, private, banks and NBFCs have an equal share in incremental credit. More importantly, most NBFCs do not fund large projects or industrial houses, so their relative share in consumer and small business finance is even greater. As per estimates of a rating agency, NBFCs accounted for 44 per cent of the total credit to retail and small business segments. They have played a very important role in making credit available to those who do not have access to formal credit. One can cite examples of excesses in any sector, but by and large flow of credit is essential to keep the momentum of growth. Even consumer credit helps in driving demand and thereby production and growth. In other words, the flow of credit to the bottom of the pyramid, millions of people in the informal sector, helps them produce more and consume more.
IIFL Finance’s focus on Financial Literacy and Environmental, Social and Governance (ESG) programs
IIFL Finance’s major clientele is from smaller locations and have been underserved in the financial system. Therefore, IIFL Finance along with IIFL Foundation has set up financial literacy centres across West Bengal, Jharkhand, Odisha, Assam, Meghalaya and Karnataka to impart financial literacy and is expanding to more states. The financial literacy centres not only educate them, but also handhold and initiate them into the financial system like opening a bank account, understanding government schemes beneficial for them, understanding crucial financial products like insurance, mutual funds etc and make financially prudent.
IIFL Finance has so far reached more than 100,000 people and aims to reach over 200,000 people by end of 2020. Dr Sarika Kulkarni, CEO, IIFL Foundation said, “Being a financial services company it is our moral obligation to create a financial literate community and help them break the vicious circle of poverty through financial prudence.”
In addition to financial literacy, IIFL Finance runs ‘IIFL Milan’, one of India’s largest Environmental, Social and Governance programs by a corporate. This is in line with IIFL’s effort to be a part of the community and ensure that the community’s well being is taken care of in addition to business relationships.
Under IIFL Milan, 10,109 activities have so far been conducted, touching 315,000 lives through varied themes. IIFL Finance has also under taken one of India’s largest girl child education initiatives in Rajasthan, where it aims to help the every girl child study at least until class 10 within the next ten years. IIFL Foundation has set up ‘Sakhiyon Ki Baadi’, unique community schools across Rajasthan, which facilitates education in inaccessible locations as per the time convenience of the students in dialogue with the local community.
Notable Awards, Achievements, and Recognitions
The Economic Times has listed IIFL among the top five companies in India, on which investors trust. It has been ranked as one of the Forbes ‘India’s Super 50 Companies’, a benchmark to identify Indian companies that exhibit high growth in profitability, sales and shareholder returns. IIFL is also among the ‘Outlook Business Outperformers’ – a prestigious list of eight companies which have beaten the Sensex over a five-year period. The Mint newspaper has recognized it among the seven financial conglomerates in India. Also, IIFL has been recognized as ‘India’s Most Trusted Financial Service Brand (Non-Bank)’ by the Brand Trust Report India Study. It has also received ‘India’s Most Promising Brand’ award at WCRC Global India Excellence Summit in London.
Growing with the Ultimate Strategies
In the last quarter of 2018, the company halved its commercial paper exposure, down from 24% to 12%. The funding mix remains well diversified including term loans, securitization and direct assignments, refinance and non-convertible debentures. The company recently raised over Rs. 1100 Cr via NCDs. The company is further in discussions with other institutions for long-term funding agreements along with sanctioned undrawn credit lines from banks. On the asset side, the loan book has a relatively short maturity pattern, with 25% of loans having a maturity of less than six months and 39% of loans having a maturity of less than 12 months. The company has a positive asset-liability mismatch across all buckets and continues to maintain a comfortable liquidity position. IIFL Finance has a long-term credit rating of AA (Stable) by Crisil, AA (Stable) by ICRA and AA (Positive) by CARE.
The Future Vision
As India is the world’s fastest growing economy, the NBFC sector has huge scope for its growth. IIFL Finance has a diversified product portfolio, caters to needs of a broad spectrum of customers – salaried, self-employed, informal sector, HNIs, and corporates. IIFL Finance aiming to address growing financial needs in under-served markets. About 85% of the book is retail in nature, therefore, the focus of the company will remain on retail lending especially in the middle-class borrower segment. Home loans, Gold loans, SME financing, and Microfinance will be key areas for growth for IIFL Finance.
IIFL FINANCE: Ensuring No Compromises in Life
