Fairfax to give $200 million in liquidity support to IIFL Finance

08 Mar 2024 CW Team

We have been long-term investors in the IIFL group of companies and have full trust and confidence in the company's strong management team led by Nirmal Jain and R Venkataraman, said Prem Watsa, chairman of Fairfax India.

Following the Reserve Bank of India's directive to cease gold loan activities due to material supervisory concerns in its portfolio, IIFL Finance has faced significant challenges, witnessing a 36% decline in its share price. As of 12:30 on Wednesday, its shares are trading down by 20%. Nirmal Jain, the managing director and founder of IIFL Finance, affirmed the company's commitment to full compliance with RBI directives while navigating business growth under regulatory guidance. RBI acknowledged the concerns raised regarding IIFL Finance's gold loan portfolio and indicated that corrective measures are underway. However, during an analyst call, IIFL Finance expressed surprise at the swiftness of RBI's actions.

As of December 31, IIFL Finance reported gold loans under management totalling Rs 246.92 trillion, constituting approximately 32% of its total loan assets. Analysts, such as brokerage Jefferies, caution that prolonged restrictions could impact earnings, reduce co-lending income, and potentially elevate the cost of finances. Jefferies estimates that the company's earnings per share (EPS) could decline by over 25-30% if the ban persists for nine months.

RBI has outlined that it will review the restrictions on IIFL Finance after completing a special audit and the company's rectification efforts.

In response to the Reserve Bank of India's directive barring it from disbursing gold loans, IIFL Finance has revealed that its major shareholder, Fairfax India, will extend up to $200 million in liquidity support. With Fairfax India holding approximately 15% stake in IIFL Finance, this move aims to ease liquidity concerns among investors and lenders triggered by the RBI's directive. We have been long-term investors in the IIFL group of companies and have full trust and confidence in the company's strong management team led by Nirmal Jain and R Venkataraman, said Prem Watsa, chairman of Fairfax India. Following the Reserve Bank of India's directive to cease gold loan activities due to material supervisory concerns in its portfolio, IIFL Finance has faced significant challenges, witnessing a 36% decline in its share price. As of 12:30 on Wednesday, its shares are trading down by 20%. Nirmal Jain, the managing director and founder of IIFL Finance, affirmed the company's commitment to full compliance with RBI directives while navigating business growth under regulatory guidance. RBI acknowledged the concerns raised regarding IIFL Finance's gold loan portfolio and indicated that corrective measures are underway. However, during an analyst call, IIFL Finance expressed surprise at the swiftness of RBI's actions. As of December 31, IIFL Finance reported gold loans under management totalling Rs 246.92 trillion, constituting approximately 32% of its total loan assets. Analysts, such as brokerage Jefferies, caution that prolonged restrictions could impact earnings, reduce co-lending income, and potentially elevate the cost of finances. Jefferies estimates that the company's earnings per share (EPS) could decline by over 25-30% if the ban persists for nine months. RBI has outlined that it will review the restrictions on IIFL Finance after completing a special audit and the company's rectification efforts.

Resources

03 Jun 2026

Jyoti Structures Launches Heat Safety Drive Across Sites

Jyoti Structures (JSL) has strengthened heat safety measures across its project sites and manufacturing facilities as temperatures rise across India. The company has implemented a Summer Safety Plan covering all transmission line projects to address risks related to heat stress, dehydration and worker fatigue.The initiative includes rescheduling work away from peak afternoon temperatures, provision of drinking water, ORS and lemon-salt solutions, and installation of rest shelters near work areas. Daily toolbox talks, worker health monitoring, first-aid preparedness, emergency transport arrange..

Real Estate

03 Jun 2026

MHADA Declares 82 Buildings Most Dangerous in Central and South Mumbai

The Maharashtra Housing and Area Development Authority (MHADA) has declared 82 buildings as most dangerous across Central and South Mumbai and has appealed to residents to vacate immediately. The list, prepared after structural assessments by the authority, identifies buildings judged to pose imminent risk to occupants and to passersby. Local civic bodies have been asked to coordinate evacuations and to make arrangements for temporary shelter and rehabilitation for displaced households. Officials said the authority prioritised buildings with visible structural distress, severe cracking, tiltin..

Infrastructure Transport

03 Jun 2026

Damage Reported At Halwara Airport Terminal After First Rains

Severe damage was reported at the terminal of Halwara Airport during the first major rain spell of the season, prompting immediate concern among aviation and local authorities. Images from the site showed water ingress and visible deterioration of the terminal interior, affecting passenger areas and ancillary services. The airport authority suspended certain operations temporarily to assess structural safety and ensure passenger wellbeing. Preliminary inspections have prioritised electrical systems and roof seals to prevent further water ingress. State aviation officials ordered a formal inqui..