IBL Finance IPO

IBL Finance Limited

₹1,02,000 /2000 sharesMinimum Investment

IBL Finance IPO Listing Details

Listed OnIssue PriceListing PriceListing Gains
NSE₹51.00₹56.00₹5.00 (9.80%)

IBL Finance IPO Details

Bidding DatesMin. InvestmentLot SizePrice Range
9 Jan ‘24 - 11 Jan ‘24₹1,02,0002,000₹51 - ₹51
Issue SizeIPO Doc
34.30Cr
RHP PDF

About IBL Finance

IBL Finance Ltd is a fintech-based financial services platform offering almost entirely digital personal loans of up to Rs. 50,000 with tenors of up to 12 months through a digital mobile app-only process. The company was initially established as a private entity under "IBL Finance Private Limited" on August 3, 2017. It commenced its lending operations in the financial year ending March 31, 2019, catering to self-employed professionals and small business entrepreneurs and later transitioned to a fintech-based financial services platform in the year 2020. The company now employs technology and data science for quick and easy lending. The company’s mobile app is called "IBL: Instant Personal Loan." The app aims to address various use cases, including planned personal expenses, emergency medical needs, and short-term business requirements. The company’s app had 381,156 logins in 2023 and on average, the app sees 27,969 active users every month. IBL Finance segments its customers based on factors like yield, risk, ticket size, and acquisition cost. This method, along with regular customer research and advanced data analytics, allows the company to offer customized products. As of August 2023, the company had 7 branches in major cities of Gujarat and Maharashtra.;
Parent Organisation
IBL Finance Limited
Founded
2017
Managing Director
Mr. Manish Patel

Strengths & Risks

  • IBL Finance Limited prioritizes credit quality and pricing, for which it relies on an underwriting platform that examines over 500 data points through artificial intelligence and machine learning. As of March 31, 2023, over 91% of the company’s personal loan customers possessed Equifax credit scores above 700.
  • Since its launch on March 31, 2023, the company has disbursed 163,282 personal loans totaling Rs. 71.05 crores. As of March 31, 2023, the personal loan business had an AUM of Rs. 14.61 crores, with 122,078 loans disbursed amounting to Rs. 52.35 crores, featuring an average ticket size of approximately Rs. 4,500 and an average loan tenor of 5 months.
  • With its mobile-first, app-only model, IBL Finance ensures a direct and efficient approach to serving digitally connected Indians. The "IBL: Instant Personal Loan" app has a paperless and fully digital process, with approval for instant personal loans in under 5 minutes.
  • Their cohort-based collections model efficiently manages outstanding dues through digital reminders, tele-calling, and on-ground collection strategies. Back-end analytics and payment behavior scorecards guide the allocation of delinquent loans to maximize overall debt management efficiencies.
  • The company's main revenue source is interest income from financing activities, comprising 88.75%, 96.69%, and 96.77% of total revenue for financial years 2023, 2022, and 2021. As of March 31 in those years, their loan book amounted to Rs. 14.61 crores, Rs. 8.42 crores, and Rs. 2.63 crores, respectively. The company's financial performance is notably sensitive to interest rate volatility, and failure to manage this risk could adversely impact the net interest margin, affecting the overall business and financial condition.
  • Legal proceedings involving the Company, Directors, Promoters, and group companies are underway, and an unfavorable outcome in these cases could impact business, financial condition, and results of operations.
  • In 2021, the company incurred a loss after tax amounting to Rs. 0.098 crores, and achieving profitability in the future is uncertain.
  • Their loan book comprises unsecured loans, and failure to recover due amounts in a timely manner may adversely affect operations and profitability.
  • Further, the implementation of India's Insolvency and Bankruptcy Code (IBC) 2016 poses a potential risk for the company, as it may limit control over the recovery of loans from borrowers undergoing insolvency proceedings. The code's framework for creditor committee decision-making and prioritized debt repayment could impact the company's ability to efficiently recover outstanding loan amounts.
  • The company’s Gross NPAs have increased from Rs. 0.21 crores as at March 31, 2022 representing 2.48% of the loan book to Rs. 0.76 crores as at March 31, 2023 representing 5.19% of the total loans and advances. Its Net NPAs have increased from Rs. 0.16 crores as at March 31, 2022 representing 1.87% of the loan book to Rs. 0.57 crores as at March 31, 2023 representing 3.94% of the total loans and advances.
  • Issues with credit scoring models could lead to increased defaults or higher customer acquisition costs. Loss assets were written off in amounts of Rs. 3.06 crores, Rs. 0.63 crores, and Rs. 0.0614 crores as of March 31, 2023, March 31, 2022, and March 31, 2021, respectively.
  • Negative net cash flows in recent financial years from operating, investing, and financing activities may continue to adversely affect the results of operations and financial conditions in the future.
  • The customer base includes several high risk borrowers and non-payment of loans may jeopardize the company’s financial standing.
  • The company grants only short-term loans, which means the interest income in the long term is uncertain. Additionally, IBL Finance has no insurance to cover the losses they may incur as a result of their business operations.
  • They have availed unsecured loans repayable on demand, and any demand for repayment may negatively impact the cash flows. As of March 31, 2023, unsecured inter-corporate deposits amount to Rs. 0.0912 crores.

Financials

*All values are in Rs. Cr
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Application details

Apply asPrice bandApply upto
Regular51 - 51₹2 Lakh
High Networth Individual51 - 51₹2 - 5 Lakh
For IBL Finance IPO, eligible investors can apply as Regular.
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