India’s IIFL Finance will raise 12.72 billion rupees ($152 million) by selling shares, the non-bank lender said on Wednesday, aiming to shore up capital a month after the central bank barred it from offering gold loans.
In mid-March, IIFL had said it would raise up to 15 billion rupees via a rights issue, which gives preferential treatment to existing shareholders, but had not finalised the amount.
That plan came nine days after the Reserve Bank of India (RBI) ordered the company to stop sanctioning, disbursing and selling gold loans due to “material supervisory concerns” in its portfolio.
Since then, IIFL‘s stock has sunk 30% through its closing price on Tuesday. The company will sell shares at 300 rupees each, a 29% discount to the last close.
IIFL said shareholders will get one rights share for every nine shares they hold. The issue runs from April 30 to May 14.
Fairfax India, IIFL‘s top shareholder with a 15% stake, had said it would provide up to $200 million in liquidity to support the lender.
IIFL‘s gold loans under management stood at 246.92 billion rupees as of Dec. 31, accounting for 32% of its total assets.
Reuters
