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Nirmal Jain, founder and Chairman, IIFL, said that SEBI’s recent order declaring the commodity arm of IIFL as not fit and proper will not impact its other businesses and he remains optimistic about growth prospects as IIFL Holdings is demerged into three listed entities.
“Commodity broking is a separate activity. I don’t think it will impact our core business,” he told BusinessLine , when asked about the recent order by SEBI against IIFL Commodities as part of action in the National Spot Exchange case.
On the demerger of IIFL Holdings, Jain said a decision was taken to re-organise the businesses about a year ago. The National Companies Law Tribunal is expected to take up the proposal on Friday (March 1).
The demerger and subsequent listing will be of three arms – IIFL Finance (loans and mortgages), IIFL Wealth (wealth and asset management) and IIFL Securities (capital markets).
“When these companies are listed, they will become completely independent in terms of management and governance,” he said, adding that the three businesses will be independently managed with independent board of directors and they will grow independently.
Two of the three businesses — loans and mortgages and wealth and asset management, have external private equity investors. They will now have price discovery and exit option in the secondary markets, post-listing and expiry of lock-in periods.
Upbeat on loan arm
Despite the challenges in the non-banking financial sector, Jain is upbeat about the prospects of IIFL’s loan and mortgage arm and said he expects 15 per cent to 20 per cent growth in its loans in 2019-20.
“We are growing our branch network and in the next fiscal we will set up another 100 branches. We are also expanding the products available in the branch,” he said.
IIFL Finance had recently signed a binding agreement with IndoStar Capital Finance to sell its commercial vehicle finance business.
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