IFL Finance Limited IPO

01At a glance

What the company does: lends against pledged gold, and services an older book of home loans and loans against property (AP p.3).

Who pays it: self-employed people, small traders, salaried workers and informal-sector borrowers; 33,951 active customers at March 2026, none material on their own (AP p.3, AP p.5).

Why it is raising money: ₹1,500 million to add to its capital base, and the rest for general purposes (AP p.4).

How fast it has grown: AUM from ₹2,791 million in FY24 to ₹5,205 million in FY26, most of it in FY26; profit from ₹121 million to ₹216 million (AP p.5, AP p.6).

The one thing to understand: a small lender shifting fast into gold loans with thinner margins. Disbursements nearly tripled in FY26, to ₹13,364 million, while yield fell from 23.11% to 19.08% and net interest margin from 14.20% to 11.18% (AP p.5, AP p.6).

02The business, in plain words

A gold-loan lender lends a share of the value of jewellery that a borrower pledges, usually for a few months, and auctions the gold if the loan is not repaid. It earns the interest spread, and must keep its own borrowing costs and branch costs below it.

A trader in Jaipur needs cash for a few months → pledges gold jewellery at an IFL branch → IFL lends up to 75% of its value → the trader repays with interest and takes the gold back.

The company is registered with the RBI as an NBFC-investment and credit company, and caps loan-to-value at 75% (AP p.3, AP p.5). Its branches are in Delhi (31), Rajasthan (33), Madhya Pradesh (11), Uttar Pradesh (9) and Haryana (4) (AP p.3).

Earnings equation: Profit ≈ AUM × (yield − cost of borrowing) − operating cost − credit cost. In FY26 yield was 19.08%, cost of borrowing 11.53% and operating expense 5.39% of assets (AP p.6).

03Where the money comes from

Source: AP p.5.

Gold loans are the strategic focus, and the older home-loan and property-loan books are being run down (AP p.3). The document does not split AUM by product in the pages read.

04The growth record

Source: AP p.5, AP p.6.

05What the growth is made of

AUM grew 57% in FY26 on disbursements that nearly tripled, consistent with a shift towards shorter gold loans (AP p.3, AP p.5). Yield fell four points over the two years (AP p.6). Cost of borrowing fell from 13.91% to 11.53%, partly offsetting it (AP p.6). Operating costs were flat while the book grew, so the cost-to-income ratio fell from 58.98% to 43.14% (AP p.6).

06Earnings quality

Credit costs have been almost nil: ₹5.19 million in FY26 and nothing in FY25 (AP p.6). Gross stage 3 loans were 0.79% at March 2026, and provision coverage only 27.62% (AP p.6).

07The balance sheet

Source: AP p.6.

Borrowings doubled in FY26 and capital adequacy halved, to 33.97% (AP p.6). The credit rating rose from CRISIL BBB- to BBB in FY26 (AP p.5).

08What the money is for

Source: AP p.4.

09Who is selling

Source: AP p.1. The last row is our arithmetic from the total of 3,000,000. The other promoter-group sellers are Arvind Kumar Bansal HUF, up to 209,990 shares, and Kriti Suri, up to 192,324 shares (DRHP p.1).

10Promoters

The promoters are Gopal Bansal, Sunita Bansal and India Finsec Limited, which holds 71.01% (AP p.5).

11Who already owns it

Source: AP p.5.

Promoters and promoter group hold 99.68% (AP p.5, our arithmetic).

12What changed just before the IPO

• Gold-loan push: disbursements up 179% in FY26 (AP p.5).
• Rating upgrade: to CRISIL BBB (AP p.5).
• Leverage: borrowings doubled and capital adequacy fell to 33.97% (AP p.6).
• Allotments: the last allotment before the offer was a rights issue to India Finsec Limited at ₹18.50 a share in February 2025; the company has issued no bonus shares since incorporation (DRHP p.92).
• Pre-IPO placement: the company may place up to 11,500,000 shares before filing the red herring prospectus, at a price not yet set (DRHP p.2).
• Auditor: no change of statutory auditor in the three years before the filing (DRHP p.82).
• Company form: incorporated as a public limited company in September 2015 (DRHP p.80).

13Capacity and expansion

The company added 21 branches over two years, to 88 (AP p.5). The fresh issue adds capital for further lending (AP p.4).

14Market size and industry structure

The D&B report cited in the offer document describes the growing role of non-bank lenders in credit (AP p.4).

15Competitive position

What the document claims, and what it rests on:

• Branch-led secured lending in north and central India (AP p.3).
• Low credit losses so far (AP p.6).

Against that: a BBB rating, a small scale and a regional footprint (AP p.3, AP p.5).

16Peers the company named

The peer comparison was not read in detail for this study. For IFL Finance the document gives FY26 earnings per share of ₹2.55 and return on equity of 12.68% (AP p.6). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Margin. Net interest margin fell three points in FY26 (AP p.6).
• Funding. A BBB rating limits and raises the cost of borrowing (AP p.5).
• Region. All branches are in five northern and central states (AP p.3).

18Litigation and regulatory matters

The litigation summary was not read in detail for this study.

19Related-party transactions

India Finsec Limited, the parent, holds 71.01% (AP p.5). Transactions with it were not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• AUM by product: gold, home, property.
• Gold held as collateral, in grams or value.
• Average loan tenure for gold loans.
• Transactions with India Finsec, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What share of AUM is gold loans, and at what average loan-to-value?
2. Why did yield fall from 22.57% to 19.08% in one year?
3. How often has the company auctioned gold, and what were the losses?
4. What does India Finsec provide to the company, and on what terms?
5. What rating does the company expect after the issue, and what will it do to borrowing costs?

2Sources and cited facts

This study was read from 2 documents the company filed. The 47 figures it cites are listed under the document each came from, with the page and the sentence as printed.