1. At a Glance – Blink and You’ll Miss the Drama
₹539 stock price. Down ~13.5% in a single day. Market cap ~₹22,915 Cr. AUM at a chunky ₹98,336 Cr. Q3 FY26 PAT at ₹501 Cr. And yet, the market behaved like someone shouted “Income Tax special audit” in a crowded theatre. Welcome to IIFL Finance, where scale meets scrutiny, and growth wears a regulator-issued helmet.
In the last 3 months, the stock still managed a ~10% return. Over one year? Nearly 40%. But January 2026 decided to test investor heart rates with RBI baggage, gold-loan paranoia, and tax notices flying around like wedding invites. Despite that, the operating engine kept running—revenue up 40% YoY this quarter, financing margins recovering, and asset quality stabilising after last year’s mess.
Valuation? Screen shows P/E ~17.9x. But hold that thought—we’ll recalculate it properly (because annualising EPS is not for the faint-hearted or the lazy). ROE sits at a sleepy ~5% last year, debt-to-equity at a muscular 4.53x (NBFC hai bhai), and ROCE around 8.8%.
This is not a sleepy lender. This is a high-beta, high-noise, multi-product NBFC trying to convince the market that the worst is behind it. Is it? Or is this just the interval? Let’s find out.
2. Introduction – A Full Thali NBFC With One Item Undercooked
IIFL Finance is that restaurant with a massive menu—home loans, gold loans, microfinance, LAP, digital MSME loans, and a side of construction finance (now mostly exited). Over two decades, it built scale, branches, and customers faster than many peers. From FY20 to FY24, AUM doubled from ~₹37,900 Cr to ~₹76,700 Cr. By Q3 FY26, it sprinted further to ~₹98,336 Cr.
But scale in Indian NBFCs is like riding a Royal Enfield—powerful, noisy, and if you ignore one screw, RBI will notice.
March 2024 was that screw. RBI told IIFL to stop sanctioning and disbursing gold loans due to supervisory concerns around assaying and certification. The market panicked. The stock crashed. Analysts rewrote Excel models at 2 a.m. WhatsApp University declared the company “finished”.
Fast forward to Q3 FY26: gold loan book revived, YoY growth of ~189% in that segment, asset quality improving, margins crawling back, and S&P upgrading outlook to Positive.
Yet, January 2026 brings income-tax special audits and GST penalties—procedural, says the company, but markets hate surprises more than bad news.
So the big question: is IIFL a phoenix or just very good at fire drills?
3. Business Model – WTF Do They Even Do?
Think of IIFL Finance as a retail credit supermarket.
🏠 Home Loans (35% of FY24 AUM)
Affordable housing, non-metros, sub-₹20 lakh tickets. 389 branches. PSL-compliant goodness. This is the boring-but-stable uncle at the family function—quiet, reliable, and pays the bills.
🪙 Gold Loans (30% of FY24 AUM)
~2,750 branches across 25 states. High yields, quick turnaround, but also the segment that invited RBI to the party. After the March 2024 ban, the company focused on collections and compliance. Q3 FY26 shows a rebound, but trust takes longer to rebuild than AUM.
👩🌾 Microfinance (17%)
29.7 lakh women borrowers. Small-ticket, high-touch, politically sensitive. Growth from 9% (FY20) to 17% (FY24) shows intent. Credit costs here decide whether ROE smiles or sulks.
🏢 LAP & SME Loans (11%)
Secured loans, longer tenure, moderate yields. Less sexy, more predictable.
📱 Digital Loans (5%)
Unsecured MSME and personal loans. 91% MSME tickets under ₹10 lakh. Algorithm-heavy, data-driven, and still a small but growing piece.
🏗️ Construction & Real Estate (2%)
Once 13% in FY20, now mostly sold down. AIF exit in FY22 cleaned up the balance sheet. Thank you for leaving quietly.
98% of the loan book is retail. That’s IIFL screaming to the regulator: “Dekho
