IIFL Finance To Get $200 Million Liquidity Support From Fairfax India
The RBI's embargo raised liquidity concerns among investors and lenders, IIFL Finance said.
Fairfax India Holdings Corp. has committed to infuse $200 million in IIFL Finance Ltd., providing vital liquidity support days after the Reserve Bank of India imposed restrictions on the company's gold loan disbursements.
"The RBI's embargo has raised liquidity concerns amongst the company’s investors and lenders," the company said in an exchange on Wednesday while announcing the fundraise.
Prem Watsa, chairman of Fairfax India, a longstanding investor in IIFL group, said it has "have full trust and confidence in the company's strong management team led by Nirmal Jain and R Venkataraman".
The RBI asked the company to stop sanctioning any new gold loans from March 5. It has also been barred from assigning, securitising and selling any of its gold loans. However, the company can continue servicing its existing loans, the central bank said.
Restrictions placed by the RBI could impact the company's earnings and lower the co-lending income, according to Jefferies India Pvt.
