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IIFL Finance Ltd.

BSE: 532636 Sector: Financials
NSE: IIFL ISIN Code: INE530B01024
BSE 00:00 | 24 Apr IIFL Finance Ltd
NSE 05:30 | 01 Jan IIFL Finance Ltd
OPEN 76.10
PREVIOUS CLOSE 77.85
VOLUME 3846
52-Week high 229.36
52-Week low 69.65
P/E 23.71
Mkt Cap.(Rs cr) 2,817
Buy Price 74.20
Buy Qty 150.00
Sell Price 75.75
Sell Qty 2.00
OPEN 76.10
CLOSE 77.85
VOLUME 3846
52-Week high 229.36
52-Week low 69.65
P/E 23.71
Mkt Cap.(Rs cr) 2,817
Buy Price 74.20
Buy Qty 150.00
Sell Price 75.75
Sell Qty 2.00

IIFL Finance Ltd. (IIFL) - Chairman Speech


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Company chairman speech

Dear Shareholders

An entrepreneurial venture can never have a smooth one-way ride. It isusually a bumpy roller coaster journey. In the wake of the IL&FS fiasco NBFCs andHFCs especially the ones founded by first generation entrepreneurs have been put totrial by fire during the last year. One can say the industry has passed through a kind ofcrisis. Historically the industry has passed through several crises leading toprogressive strengthening of regulatory framework and has emerged stronger from everycrisis. Let no crisis be wasted. Your company is determined to be even more resilient andresolute once the storm blows over and dust settles.

Let us look at the background of the industry.

In the recent past a couple of entities defaulted to mutual funds;primary cause being their concentrated wholesale exposures were funded by short termcredit. This caused a panic withdrawal of credit to stand-alone non-banking lenders. TheNBFCs backed by industrial houses have been perceived to be safer as expectations ofsupport from parent's cash flow usually provide comfort.

In the last two decades NBFCs evolved their business models to fulfiltwo major voids in the credit delivery by banks. One wholesale loans to real estate andconstruction (prior to all approvals which banks cannot do) or promoter funding againstcollateral of shares. Two retail loans to small businesses and consumers leveragingtheir branch network and technology that banks find unviable or unreachable for smallticket or inadequate income record holders.

In the recent turmoil investors and lenders have discovered that riskwith the wholesale funding is much greater. At the same time retail loans not only havelesser and dispersed risk but also have a ready market in banks. That is what makes ourbusiness model which is focused on retail loans a lot more resilient than that of peers.Our exposure to wholesale funding is 15% and will reduce to less than 10% over time. Ourpredominant and growing business model is focused on retail lending and digital delivery.A large part of loans originated by us qualify as priority sector lending for banks andthus contribute to financial inclusion and nation's social objectives as well.

It is pertinent to note that recent policy initiatives underline theGovernment and the RBI's recognition of the role of NBFCs and HFCs in our country'sdevelopment and last mile credit delivery. They include bank funding to NBFCs for onwardlending to small ticket borrowers guidelines for co-lending with banks and partial creditguarantee by the Government for first-loss on securitised assets issued by NBFCs tobanking entities. The natural synergy between banks and NBFCs for delivery of credit tounder-served regions and people will evolve into a long-term win-win partnership.

Our strategy to fortify our moat is simple.

We deliver retail loans digitally with constant innovation. We havemade processes end-to- end paperless and digital to the extent existing regulationspermit. We continue to leverage technology for automated credit approvals progressivelyreducing risk and cost by taking advantage of our wide network of physical branches. YourCompany is focused and resolute to emerge stronger and continue to deliver credit tounder-served households and under-accessed geographies.

Regards

Nirmal Jain

Chairman