India's IIFL Finance keen to boost fundraising via bonds - official

By Bhakti Tambe

MUMBAI (Reuters) - India's IIFL Finance is keen to raise more funds through the bond market with the recent softening in capital market rates, a senior company official said on Friday.

"We would like to increase the share of domestic bonds in our portfolio. It will depend on pricing, and whether we are getting the right kind of tenor," Kapish Jain, group chief finance officer at IIFL Finance told Reuters.

The non-bank financier is in talks with investors such as mutual funds and insurance companies to expand its borrowing in bonds, Jain added.

As on March 31, the company's total borrowing stood at nearly 40 billion rupees ($485.07 million). Its borrowing mix currently comprises 60% from banks, 20% from the bond market and the rest from development finance institutions.

Jain sees the borrowing going up by around 8 billion rupees on an incremental basis in 2023/24 to fund the targeted growth of 25% in its assets under management. He also expects an increase of 35-40 basis points in the overall cost of borrowing from 8.9% at the end of March.

"Some of our bank borrowings would go for an increase because of the way MCLRs (marginal cost of funds based lending rate) have moved up. Maybe (borrowing cost could rise) by 20-30 basis points but we still have an opportunity to look for avenues of raising funds through bond market," Jain added.

IIFL Finance opened its public issue of bonds for subscription earlier in the day to raise up to 15 billion rupees.

The company will also look to raise $50 million to $100 million through dollar bonds in the current financial year. "We are in constant conversations with multiple lenders. It all depends on how the market behaves," Jain said.

($1 = 82.4623 Indian rupees)

(Reporting by Bhakti Tambe; editing by Eileen Soreng)