IIFL Finance's stock increased by about 8% on Thursday following a two-day period during which it fell 20%. At 9:50 am, IIFL Finance shares were up 9.72% to trade at Rs 420 per on the Bombay Stock Exchange (BSE). Note that the circuit limit for IIFL Finance shares has been lowered by the major exchanges, BSE and NSE, from 20% to 10%.
This comes after IIFL Finance said yesterday that the company's largest shareholder, Fairfax India, has committed to give up to $200 million in liquidity support.
Days after IIFL Finance was prohibited by the Reserve Bank of India (RBI) from approving and disbursing gold loans, the statement was made.
Prem Watsa, chairman of Fairfax India, which owns around 15% of IIFL Finance, stated, "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."
On Monday, the RBI requested that IIFL Finance cease authorizing, paying off, and selling gold loans immediately, citing "material supervisory concerns" in the company's gold loan portfolio.
It should be mentioned that during the last five trading sessions, shares of IIFL Finance have decreased by more than 30%.
"We are committed to complying fully with RBI's directives and growing the business under the regulator's guidance," stated Nirmal Jain, the company's founder and managing director.
