IIFL Finance: A Pioneer in Scripting India's NBFC Story
While the aim of almost every organization is to be the largest or the most profitable ones, some dream of becoming the most respected organization in their industry. When Nirmal Jain (Founder & Chairman) incepted IIFL Group in 1995, he had this one vision of making his company the most trusted and respected brand in the domain of financial services. Today, IIFL is a listed company(Bloomberg: IIFL IN, NSE: IIFL, BSE: 532636) known as India’s leading integrated financial services group with diverse operating business, namely Non-Banking Housing Finance, Wealth & Asset Management, Financial Advisory and Broking, Mutual Funds & Financial Product Distribution, Investment Banking, Institutional Equities, Realty Broking and Advisory Services.
Today, under the aegis of Sumit Bali (CEO & Executive Director) IIFL Finance has transformed as one of the largest and most diversified non-banking finance companies in India growing stronger as a systematically important non-deposit accepting non-banking finance company. Sumit discusses at large with CEO Insights regarding the company’s inception, journey offerings and future plans.
Q. Tell us about the inception and growth story of IIFL.
A. The IIFL Group was founded over two decades ago by Nirmal Jain, our Chair person, in 1995 as an equity research company. He is a first generation entrepreneur, who is credited with building one of the largest financial services groups in India in just two decades. Under his able leadership and guidance, the company’s pioneering work in equity research had set new standards. Further in 1999, he launched India Infoline website. But it was in 2000 that the company forayed into the transaction space with the launch of the online trading portal.
We later started diversifying the business model by adding multiple business streams while remaining focused on the core domain of financial services. Today, IIFL is one of the largest financial services firms in India, with over 2,300 branches and digital channels, and is backed by marquee global investors like Fairfax Group, private equity major General Atlantic, and the UK government’s private equity fund - CDC Group.
Q. An incredible growth story! Could you highlight on the current stature of the firm?
A. IIFL’s NBFC arm was initially incorporated in the year 2004 as India Infoline Investment Services
Today, under the aegis of Sumit Bali (CEO & Executive Director) IIFL Finance has transformed as one of the largest and most diversified non-banking finance companies in India growing stronger as a systematically important non-deposit accepting non-banking finance company. Sumit discusses at large with CEO Insights regarding the company’s inception, journey offerings and future plans.
Q. Tell us about the inception and growth story of IIFL.
A. The IIFL Group was founded over two decades ago by Nirmal Jain, our Chair person, in 1995 as an equity research company. He is a first generation entrepreneur, who is credited with building one of the largest financial services groups in India in just two decades. Under his able leadership and guidance, the company’s pioneering work in equity research had set new standards. Further in 1999, he launched India Infoline website. But it was in 2000 that the company forayed into the transaction space with the launch of the online trading portal.
We later started diversifying the business model by adding multiple business streams while remaining focused on the core domain of financial services. Today, IIFL is one of the largest financial services firms in India, with over 2,300 branches and digital channels, and is backed by marquee global investors like Fairfax Group, private equity major General Atlantic, and the UK government’s private equity fund - CDC Group.
Q. An incredible growth story! Could you highlight on the current stature of the firm?
A. IIFL’s 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 and is currently known as India Infoline Finance of IIFL Finance. Today IIFL Finance is the largest entity in the IIFL group, in terms of share of business & profitability, and caters to a broad spectrum of customers salaried, self employed, informal sector, HNIs, and corporates.
Currently we are engaged in the business of various loans. We offer small ticket loan products to retail borrowers, delivered through a PAN India branch network. As of September 2019, the company had loan Assets Under Management (AUM) in excess of Rs.35,000 crore . Our total capital adequacy ratio at over 21 percent is well above the minimum requirement. About 85 percent of our loans are retail in nature and close to 50 percent is priority sector lending compliant. We also have a long term credit rating of AA (Stable) by Crisil, AA (Stable) by ICRA and AA (Positive) by CARE.
Q. Kindly throw some light on the offerings of the company.
A. As per estimates of a rating agency, NBFCs accounted for 44 percent of the total credit to retail and small business segments, and played a key role in making credit available to those who do not have access to formal credit. In other words, the flow of the credit to the bottom of the pyramid, millions of people in the informal sector, helps them produce more and consumer more. We are strategically playing an instrumental role in keeping this wheel moving.
IIFL Finance has over five million customer base. Our NBFC operation has branches mostly in smaller towns and rural locations, and act as a one-stop-shop for customers, building long term relationship for life. Starting from home loan, business loan, gold loan and microfinance to offering products like health insurance, life insurance, mutual funds, equities, financial planning, commodities, derivatives, currency and fixed deposits, our branches offer everything.
Q.Looking at the current market condition, how is IIFL Finance planning its future growth?
Public Limited Company in the year 2007 and is currently known as India Infoline Finance of IIFL Finance. Today IIFL Finance is the largest entity in the IIFL group, in terms of share of business & profitability, and caters to a broad spectrum of customers salaried, self employed, informal sector, HNIs, and corporates.
IIFL Finance remains well capitalized at a time when most NBFCs are struggling with liquidity squeeze
Currently we are engaged in the business of various loans. We offer small ticket loan products to retail borrowers, delivered through a PAN India branch network. As of September 2019, the company had loan Assets Under Management (AUM) in excess of Rs.35,000 crore . Our total capital adequacy ratio at over 21 percent is well above the minimum requirement. About 85 percent of our loans are retail in nature and close to 50 percent is priority sector lending compliant. We also have a long term credit rating of AA (Stable) by Crisil, AA (Stable) by ICRA and AA (Positive) by CARE.
Q. Kindly throw some light on the offerings of the company.
A. As per estimates of a rating agency, NBFCs accounted for 44 percent of the total credit to retail and small business segments, and played a key role in making credit available to those who do not have access to formal credit. In other words, the flow of the credit to the bottom of the pyramid, millions of people in the informal sector, helps them produce more and consumer more. We are strategically playing an instrumental role in keeping this wheel moving.
IIFL Finance has over five million customer base. Our NBFC operation has branches mostly in smaller towns and rural locations, and act as a one-stop-shop for customers, building long term relationship for life. Starting from home loan, business loan, gold loan and microfinance to offering products like health insurance, life insurance, mutual funds, equities, financial planning, commodities, derivatives, currency and fixed deposits, our branches offer everything.
Q.Looking at the current market condition, how is IIFL Finance planning its future growth?
A. IIFL Finance remains well capitalized at a time when most NBFCs are struggling with liquidity squeeze. In the second quarter of FY19, we have raised about Rs.5.4 billion rough on-lending and public bonds and additionally $100 million through external commercial borrowings from EDC Canada.
The funding mix remains well diversified including term loans, securitization and direct assignments, refinance and non-convertible debentures and dependence on commercial papers is negligible now. We have a positive asset liability mismatch across all buckets and continue to maintain a comfortable liquidity position. We aim to address growing financial needs in underserved markets. As 85 percent of our book is retail in nature, our focus will remain on retail lending especially in the middle class borrower segment, with key focus on home loans, gold loans SME financing and Microfinance.
Key Management:
Nirmal Jain, Founder & Chairman
A first generation entrepreneur, Nirmal is credited with building one of the largest financial service groups in India. Holding a PGDM from IIM-Ahmedabad, his journey from Hindustan Lever limited to turning the NBFC game in a financially complex country like India is a tale to tell.
Sumit Bali, CEO& Executive Director
A seasoned banker carrying vast experience in the Indian corporate sector, Sumit holds a PDGM from IIM Ahmedabad. Prior to joining IIFL Finance, he has worked with various MNCs in key positions throughout his career.
Office: Ahmedabad
Offerings: Home Loan, Business Loan, Gold Loan And Microfinance To Offering Products Like Health Insurance, Life Insurance, Mutual Funds, Equities, Financial Planning, Commodities, Derivatives, Currency & Fixed Deposits
Awards & Recognitions:
•Ranked as one of the Forbes ‘India’s Super 50 Companies’
•Listed among ‘Outlook Business Outperformers’ a prestigious list of eight companies which have beaten Sensex over a five-year period
•Recognized as India’s Most Trusted Financial Service Brand (Non-Bank) by the Brand Trust Report India Study
•Received India’s Most Promising Brand award at WCRC Global India Excellence Summit in London
The funding mix remains well diversified including term loans, securitization and direct assignments, refinance and non-convertible debentures and dependence on commercial papers is negligible now. We have a positive asset liability mismatch across all buckets and continue to maintain a comfortable liquidity position. We aim to address growing financial needs in underserved markets. As 85 percent of our book is retail in nature, our focus will remain on retail lending especially in the middle class borrower segment, with key focus on home loans, gold loans SME financing and Microfinance.
Key Management:
Nirmal Jain, Founder & Chairman
A first generation entrepreneur, Nirmal is credited with building one of the largest financial service groups in India. Holding a PGDM from IIM-Ahmedabad, his journey from Hindustan Lever limited to turning the NBFC game in a financially complex country like India is a tale to tell.
Sumit Bali, CEO& Executive Director
A seasoned banker carrying vast experience in the Indian corporate sector, Sumit holds a PDGM from IIM Ahmedabad. Prior to joining IIFL Finance, he has worked with various MNCs in key positions throughout his career.
Office: Ahmedabad
Offerings: Home Loan, Business Loan, Gold Loan And Microfinance To Offering Products Like Health Insurance, Life Insurance, Mutual Funds, Equities, Financial Planning, Commodities, Derivatives, Currency & Fixed Deposits
Awards & Recognitions:
•Ranked as one of the Forbes ‘India’s Super 50 Companies’
•Listed among ‘Outlook Business Outperformers’ a prestigious list of eight companies which have beaten Sensex over a five-year period
•Recognized as India’s Most Trusted Financial Service Brand (Non-Bank) by the Brand Trust Report India Study
•Received India’s Most Promising Brand award at WCRC Global India Excellence Summit in London