IIFL Finance Limited reported a 93% year-on-year increase in consolidated net profit to ₹766 crore for the quarter ended September 30, 2026, surpassing the analyst estimate of ₹735 crore. The retail-focused NBFC’s performance was underpinned by a 38% YoY expansion in Assets Under Management (AUM) to ₹1,24,268 crore and robust asset quality metrics.

Total income rose 23% YoY to ₹4,246 crore (₹42.46 billion), while pre-provision operating profit (PPOP) increased 31% YoY to ₹1,355.1 crore. The sharp rise in profitability was aided by operating leverage and a significant decline in loan losses and provisions, which fell to ₹280.8 crore from ₹500.3 crore in the corresponding period last year.

Segment performance and asset quality

Gold loans emerged as the primary growth driver, with AUM surging 90% YoY to ₹65,729 crore, now constituting 53% of the total portfolio. Home finance AUM stood at ₹43,070 crore, up 4% QoQ, while MSME loans grew 11% QoQ to ₹11,948 crore. Asset quality remained robust, with Gross NPA improving to 1.48% (down 7 bps QoQ) and Net NPA at 0.87% (up 5 bps QoQ).

What the numbers show

The divergence between the 38% YoY AUM growth and the 28% YoY revenue growth highlights the impact of portfolio mix shifts and yield compression in certain segments. While gold loans, which carry higher yields, expanded rapidly, the overall interest spread remained stable at 7.4%. However, the most striking metric is the 93% YoY profit growth against a 31% YoY PPOP growth. This indicates that the bottom-line expansion was disproportionately driven by the reduction in credit costs rather than pure operating leverage alone, reflecting the success of the company’s pivot toward secured lending and improved underwriting standards. The slight uptick in Net NPA to 0.87% despite the drop in Gross NPA suggests some recovery delays or migration within the secured book, though absolute levels remain low.

Strategic initiatives and outlook

The company completed a ₹25 crore tokenised bond transaction, becoming the first non-PSU NBFC in India to do so. Additionally, Fitch Ratings upgraded IIFL Finance’s Long-Term Issuer Default Rating to 'BB-' from 'B+'. Management noted that as gold loan growth moderates, momentum is expected to shift toward home loans and secured MSME lending. The company maintains a strong liquidity position of ₹13,805 crore and a consolidated CRAR of 23.5%, supporting its strategy of resilient, capital-efficient growth through co-lending partnerships and AI-led operational efficiencies.

IIFL Finance Limited has allotted 4,650 Secured, Listed, Rated, Market Linked Non-Convertible Debentures (NCDs) aggregating ₹46.50 crore on a private placement basis. The allotment was approved by the Finance Committee of the Board of Directors on October 5, 2026.

The debentures are issued under Series MLD 1 with a face value of ₹1 lakh each. These instruments are proposed to be listed on the National Stock Exchange of India Limited. The coupon or interest for these securities is linked to the performance of the Nifty 50 Index.

Instrument Details

The NCDs have a tenor of 1,281 days from the deemed date of allotment. Both interest and principal amounts will be paid upon maturity. The security cover is maintained through a first ranking pari passu charge by way of hypothecation over the company's receivables, book debts, loans, advances, and current assets.

Security and Redemption Terms

The company maintains a security cover of at least 100% of the outstanding amounts in respect of the debentures at all times during their tenor. In the event of default or delay in payment of interest or redemption of principal exceeding three months from the due date, IIFL Finance shall pay additional interest at 2% per annum over the coupon rate for the defaulting period.

Redemption of the debentures will occur at ₹1 lakh per debenture on the maturity date, April 8, 2030. No special rights, interests, or privileges are attached to these non-convertible debentures.