New Delhi
Fitch Ratings on Monday has affirmed IIFL Finance’s ratings with a stable outlook following the Reserve Bank of India’s (RBI) decision to lift a ban on new gold-backed lending. This ban, imposed in March, was removed in September, allowing IIFL Finance to stabilize its operations.
Fitch has confirmed IIFL Finance Ltd’s long-term issuer default rating (IDR) and medium-term note programme rating at ‘B+’, also removing the ratings from ‘Rating Watch Negative’. The stable outlook indicates expectations of gradual stabilization in IIFL’s franchise after the ban was lifted.
According to Fitch, while funding for gold-backed loans remains uncertain, lending volumes in the housing finance and microfinance sectors have shown resilience. This stability is expected to support the overall credit profile of IIFL Finance, even if the gold-loan business takes time to regain its previous scale.
Fitch anticipates that profitability for IIFL Finance should gradually recover as lending volumes improve. Sustained profits in housing finance and microfinance will be crucial for the group’s profitability, especially if the gold-backed lending segment does not recover quickly.
