IIFL Finance shares experienced a sharp 10% decline on Thursday, January 22, despite reporting strong quarterly financial results. The stock drop was triggered by the company's announcement of receiving a communication from the Income Tax department directing a special audit under Section 142(2A) of the Income Tax Act, 1961.

Regulatory Development Impact

The Income Tax department has directed IIFL Finance to conduct an audit of its accounts for a specified block period and has appointed a special auditor for this purpose. The company clarified in its regulatory filing that this direction is procedural in nature, connected to ongoing assessment proceedings, with no adjudication or determination made against the company. At this stage, no financial impact can be ascertained from this development.

Strong Q3 Financial Performance

Despite the regulatory concerns, IIFL Finance delivered impressive financial results for the December quarter. The company's financial metrics showed substantial growth across key parameters:

Net Interest Income also demonstrated sequential growth of 10% from the September quarter, indicating sustained momentum in the company's core lending operations.

Gold Loans Drive Growth

The standout performer in IIFL Finance's portfolio was its gold loan segment, which registered exceptional growth during the quarter. Gold loans surged by 189% on a year-on-year basis and grew 26% sequentially, highlighting the strong demand for gold-backed financing solutions.

Assets Under Management Analysis

The company's AUM performance across different business segments showed mixed results, reflecting strategic repositioning in various lending categories:

The MSME loans segment benefited from strategic re-calibration towards low-risk secured lending and a pullback from unsecured lending. However, the microfinance AUM declined due to ongoing pressures in the unsecured lending segment.

Market Response

Shares of IIFL Finance traded 10% lower at ₹560.60 following the announcements. The stock had opened the session trading close to its 52-week high of ₹675.00, making the decline particularly notable given the strong underlying financial performance reported by the company.

IIFL Finance Limited has announced a board meeting scheduled for January 22, 2026, to deliberate on crucial financial matters for the third quarter of fiscal year 2026. The company has formally notified both the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) about this important corporate development.

Board Meeting Agenda

The board meeting will address several key items that are significant for shareholders and market participants. The primary focus will be on reviewing the company's financial performance for the recently concluded quarter.

Financial Results and Dividend Consideration

The board will consider and approve the consolidated and standalone unaudited financial results for the quarter and nine months ended December 31, 2025. Additionally, directors will deliberate on the declaration of an interim dividend for the financial year 2025-26, though the company has indicated this consideration is subject to board approval.

The meeting agenda also includes provisions for any other business matters that may arise with the permission of the chairperson, ensuring comprehensive coverage of corporate governance requirements.

Regulatory Compliance and Trading Window

In accordance with the company's Code of Conduct for prevention of Insider Trading, IIFL Finance has implemented a trading window closure for designated persons. This restriction applies to directors and their immediate relatives and will remain in effect until 48 hours after the publication of the financial results.

Corporate Communication

The formal intimation was signed by Samrat Sanyal, Company Secretary & Compliance Officer, and has been communicated to all relevant stock exchanges including BSE, NSE, and India International Exchange (IFSC) Limited. The notification is also available on the company's official website at www.iifl.com , ensuring transparent communication with all stakeholders.

This board meeting represents a routine but important corporate governance activity that will provide investors and market participants with insights into IIFL Finance's operational and financial performance for the third quarter of fiscal year 2026.