IIFL Finance gains, to invest Rs 200 crore in subsidiary

Foreign brokerage Jefferies has initiated coverage on IIFL Finance Ltd shares with a target of Rs 760, suggesting a 25 per cent upside potential in a recently released report.

IIFL Finance rose nearly a percent in the early trade on November 16 after the board agreed as the firm looks to invest Rs 200 crores in its material subsidiary IIFL Samasta Finance Limited by subscription of equity shares.

In a meeting on November 15, the board approved the investment by subscription of about 7.48 crore fully paid-up equity shares of face value of Rs 10 at Rs 26.74 apiece, the company said in an exchange filing.

Jefferies has initiated coverage on IIFL Finance Ltd with a target of Rs 760, suggesting a 25 percent upside.

IIFL Finance has strengthened its retail franchise by expanding branches by two times in three years, which it should drive 23 er cent growth in asset under management (AUM) compounded annually, it said in a recent report.

It also sees a 26 per cent compounded annual growth rate (CAGR) in net interest income (NII) for the diversified NBFC over FY23-26.

The money raised through the investment in IIFL Samasta Finance Limited would used to support expansion, reduce gearing and improve capital adequacy, the company said.

IIFL Finance Samasta Finance provides affordable financial products to women from unbanked sections of the society. It operates in both rural and urban areas and covers 22 states in the nation.

At 10.35 am, IIFL Finance was trading at Rs 636. 95 on the NSE, up 0.71 percent from the previous close.

IIFL Finance has given a return of 42.78 percent over the last six months. The benchmark Nifty has gained 7.60 percent over the same duration.

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