1 day Ago By Divya Prata
Shares of IIFL Finance Ltd., a non-bank lender, fell almost 6%, amid speculations of a potential ratings downgrade due to a ban imposed by the Reserve Bank of India earlier this year. Delays in lifting the RBI's restrictions on its gold loan operations could lead to a potential downgrade from its current Crisil rating of AA to AA-, according to people familiar with the matter.
A downgrade in ratings can significantly affect non-bank financial companies like IIFL Finance, as their borrowing costs are often tied to these ratings. The RBI issued a ban on IIFL Finance's gold lending on March 4, citing compliance issues such as serious deviations in assaying and certifying the purity and weight of gold, breaches in loan-to-value ratios, and excessive cash disbursal and collection beyond statutory limits. Although IIFL Finance has reportedly addressed the RBI's concerns and submitted a compliance report last month, it is still awaiting feedback from the regulator.
Shares of the company fell as much as 5.81% before paring some loss to trade 5.17% lower at Rs 501.
50 apiece, as of 11:29 a.m., compared to a 0.
36 advance in the NSE Nifty 50. The stock has fallen 13.76% year-to-date.
Total traded volume so far in the day stood at 2.21 times its 30-day average. The relative strength index was at 57.
70. Out of six analysts tracking the company, three maintain a 'buy' rating, two recommend a 'hold' and one suggests 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies a downside of 8.
0%..
