The shares of one of the leading Finance stocks, specializing in providing financial services space in India, fell by 10 percent following the rumors of the IT Department’s search over suspected tax evasion and senior personnel resignation.
Price action
With a market capitalization of Rs. 13,254 crores on Tuesday, the shares of IIFL Finance Limited are trading at Rs. 332.6 down by 10 percent making a low of Rs. 326 per share compared to its previous closing price of Rs. 357.85 per share.
What Happened
IIFL Finance Limited specializing in providing financial services has fallen drastically amid Mr. Bharat Aggarwal, designated as SMP, has Resigned from the position of Business Head Unsecured Lending of the Company which is effective from January 27, closure of business hours.
Furthermore, The stock was also in the news as per sources upon rumors that the investigation wing of the income tax department had been conducting searches on the IIFL group since morning over suspected tax evasion.
About the Company
IIFL Finance Limited is one of the leading players in the financial services space in India. Together with its subsidiaries, it provides Financial Services which include home loans, gold loans, microfinance, developer & construction finance, and capital market finance; catering to both retail and corporate clients.
S&P Global Future Outlook
IIFL is expected to maintain strong capitalization, with its risk-adjusted capital (RAC) ratio projected to rise to 16-17 percent over the next two fiscal years, up from 15 percent as of March 31, 2024. This increase is due to a reduction in the loan book following the embargo, an Rs. 12.7 billion equity rights issue in May 2024, and limited dividend payouts.
The stable outlook reflects confidence that IIFL’s solid capital base and improving business volume and profitability will help it overcome operational challenges as it resumes business post-embargo. It anticipates a decrease in credit costs starting in fiscal 2026, with a gradual rise in leverage, and expects the company to maintain funding access despite market confidence fluctuations.
Financials
The company’s revenue rose by 1.69 percent from Rs 2,533.73 crore to Rs 2,576.59 crore in Q2FY24-25. Meanwhile, Net profit fell from a profit of Rs 525.52 crore to a loss of Rs 93.07 crore crore during the same period.
Written by Sridhar J
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