IIFL Capital Services Limited (formerly IIFL Securities Limited) has incorporated a wholly owned subsidiary, IIFL Capital (IFSC) Limited, at the International Financial Services Centre (IFSC), GIFT City, Gujarat, India. The Ministry of Corporate Affairs approved the incorporation on May 11, 2026, as disclosed by the company pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This development follows the company's earlier intimation dated July 28, 2025 regarding the proposed incorporation of a subsidiary in the IFSC.

Key Details of the Newly Incorporated Entity

The following table summarises the key particulars of IIFL Capital (IFSC) Limited as disclosed under Regulation 30:

Business Purpose and Regulatory Framework

IIFL Capital (IFSC) Limited has been incorporated to undertake activities as a broker-dealer and distributor in accordance with the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2025, as amended from time to time. The new entity is a wholly owned subsidiary of IIFL Capital Services Limited and is accordingly classified as a related party of IIFL Capital.

Regulatory Approvals and Shareholding Structure

The incorporation of the wholly owned subsidiary in IFSC, GIFT City was undertaken pursuant to the receipt of a No Objection Certificate from SEBI. IIFL Capital Services Limited has subscribed to 100% of the initial share capital of the new entity at face value in cash, making it a fully owned subsidiary. The disclosure was filed by Company Secretary Meghal Shah on May 12, 2026, in compliance with SEBI Master Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026.

IIFL Capital Services Limited conducted its Q4 FY26 earnings conference call on May 05, 2026, with Managing Director R. Venkataraman and CFO Ronak Gandhi addressing analysts on the company's financial performance, business developments, and regulatory matters. The call took place against a backdrop of heightened global volatility, with Venkataraman noting record FPI outflows in March and acknowledging the resilience of domestic flows in cushioning foreign selling pressure.

Full-Year FY26 Financial Performance

For the full year FY26, IIFL Capital Services reported consolidated operational revenue of ₹2,439 crores, virtually flat on a year-on-year basis. The performance across key revenue segments reflected a mixed picture, with retail equity revenues declining due to regulatory headwinds while institutional and distribution businesses posted growth.

Retail equity revenues declined 9% to ₹1,121 crores, primarily due to the full-year impact of SEBI regulatory changes that came into effect in the first quarter of the last calendar year. Institutional and investment banking revenues grew 11% to ₹712 crores, while financial product distribution income rose 16% to approximately ₹590 crores. Employee costs increased steeply to ₹687 crores, driven by higher headcount, variable pay provisioning, and a one-time charge of ₹7 crores related to a change in Labour Law. Finance costs rose 17% to ₹210 crores on account of increased working capital requirements linked to growth in the margin trade funding (MTF) book. Depreciation increased 20% due to investment in branches and technology. Operational PBT declined 22%, primarily driven by the increase in employee expenses. Other income stood at approximately ₹164 crores, which included a gain of approximately ₹90 crores from the sale of real estate held in IIFL Facility, a subsidiary of the holding company.

Q4 FY26 Quarterly Performance

On a year-on-year basis, Q4 FY26 demonstrated strong revenue recovery across most segments. The following table summarises the key quarterly comparisons:

Institutional and investment banking revenues rose sharply to ₹162 crores from ₹97 crores in Q4 FY25, driven by growth in both investment banking and broking income. FPD income of ₹182 crores was down 4% YoY, as Q4 FY25 had benefited from elevated brokerage related to certain NSE share transactions. Finance costs surged 45% to ₹63 crores due to MTF book expansion. Fees and commission expenses increased 40% on account of record sub-broker payouts. Operational PBT before MTM changes was up 14% on a year-on-year basis.

Sequential Comparison: Q4 FY26 vs Q3 FY26

On a sequential basis, operational revenue grew 10% in Q4 FY26. FPD income posted a strong 36% sequential increase to ₹182 crores, while institutional broking revenue remained virtually unchanged. Operational PBT improved 21% quarter-on-quarter.

Trading Volumes and FPD AUM Growth

Average daily turnover for Q4 FY26 stood at approximately ₹3,22,886 crores, comprising approximately ₹3,20,011 crores in F&O and ₹2,875 crores in cash. This compared to approximately ₹3,14,660 crores in Q3 FY26, with F&O at approximately ₹3,12,000 crores and cash at approximately ₹2,685 crores, representing approximately 3% growth.

Financial product distribution AUM witnessed significant expansion, growing from ₹31,000 crores to approximately ₹52,000 crores. Mutual fund assets within this grew from ₹14,000 crores to approximately ₹21,000 crores. The Ultra HNI wealth management channel, which the company has set up, accounts for approximately ₹12,000 crores of the total AUM. The company currently has approximately 50 wealth relationship managers and approximately 300 affluent or PCG broking relationship managers.

Income Tax Notices and Capital Position

The company disclosed that the income tax department conducted a search under Section 132 of the Income Tax Act. An ad-hoc payment of approximately ₹27 crores was made in the last quarter related to block assessment. Subsequently, notices of approximately ₹56 crores combined were received for IIFL Management and IIFL Facilities for the block period from April 1, 2018 to February 3, 2025. The respective companies are in the process of filing appeals against the orders. Assessment proceedings for the holding company are still in progress, with no orders or demand notices received to date. Management stated that, after considering available facts and consulting advisers, there is expected to be no material adverse impact on the financial position of the group, and no adjustments have been made.

On capital adequacy, Venkataraman noted that the company's net worth has grown from approximately ₹1,000 crores to over ₹3,000 crores over the past four years, primarily through internal accruals. The bulk of capital has been deployed in broking, MTF, and exchange margins. Management indicated that the company has sufficient capital to support approximately 20% growth in the near term. The company also disclosed the closure of its Capital Credit Opportunities Fund, having raised approximately ₹500 crores.