After being hit by the NBFC crisis in September 2018, IIFL Finance has emerged stronger as debt market investors continue to repose confidence in the company. The well-diversified NBFC raised long-term loans worth Rs.27.21 billion in Q3FY20, after mobilising funds worth Rs.4.03 billion and Rs.17.23 billion in Q1 and Q2, respectively. Due to its healthy performance, cost of funds was down by 9 basis points QoQ, whereas assets under management grew 3% to Rs.360.15 billion. It also reported better asset quality as net and gross NPA dropped to 2.3% and 1% of the overall loan book from 2.5% and 1.5%, respectively. “We manage our asset liability mismatch diligently and conservatively, with a surplus in all buckets,” said the management in its latest investor presentation.
The market has taken note of the performance with the stock gaining 91% from its 52-week low of Rs.99 in August 2019. As it rallied, outgoing IIFL CFO Prabodh Agrawal, who has been with the company since 2007, sold shares worth Rs.79 million in February, making it his second disposal in a year. After the latest disposal, his stake dropped from 0.34% to 0.22%, which is worth #131 million currently. Earlier, in November 2019, he had sold shares worth Rs.236 million.
Mutual funds, too, have trimmed their stake. Aditya Birla Sun Life MF, which held 0.37% stake in September 2019, exited the company in the December quarter. Motilal Oswal MF has a negligible stake of 0.002%. However, foreign portfolio investors have increased their stake over the same period — from 24.30% to 24.46%. While, Prem Watsa controlled Fairfax is the biggest strategic investor through HWIC Asia Fund Class A Shares with 8.87% holding, the other major investor is Ward Ferry's Asian Reconnaissance Fund with 4.01%.