IIFL Finance shares up 7% on action taken to address RBI concerns on gold loans

The stock was trading at ₹504, up 7%, on the NSE. It gained 7.5% to ₹503 on the BSE.

In its Q4 investor presentation, Nirmal Jain, Founder of IIFL Finance, noted that the embargo on fresh gold loans significantly impacted the company's business. He said that the financial services provider has "fully complied" with all regulatory requirements and addressed deficiencies.

"The special audit has been completed, and we now await the RBI's review and expect positive action soon. The business environment remains healthy, and we are optimistic about the outlook for all our other business segments," he said.

Kapish Jain, President and Group Chief Financial Officer (CFO) of IIFL Finance, said, "With the conclusion of the on ground special audit done at the behest of the RBI and in depth implementation of all the observations highlighted by RBI in inspection report, we firmly believe that we are far better placed today in working and building ourselves for the next phase of controlled and quality growth once the embargo on the gold lending business gets lifted".

In March, RBI directed IIFL Finance to cease and desist from sanctioning, disbursing, securitising or selling gold loans due to 'material supervisory concerns' in its gold loan portfolio.

Due to the RBI's embargo, the company reported frail Q4 FY24 results. The company's consolidated net profit declined 6% to ₹430.6 crore in the latest March quarter as against ₹457.6 crore in the same period last year.

The total income was reported at ₹2,922.12 crore in the January-March quarter, up from ₹2,276 crore in the year-ago period. IIFL Finance's interest income increased to ₹2,720 crore in the quarter under review from ₹2,058 crore in the corresponding period of the previous year.