IIFL Finance shares in focus as Fitch revises outlook to positive

Shares of IIFL Finance are likely to be in focus on Friday, October 17, after Fitch Ratings revised the outlook on the company’s Long-Term Issuer Default Rating (IDR) to positive from stable, while affirming the IDR at ‘B+’. The rating agency expects IIFL’s credit profile to strengthen over the next two years as its asset quality stabilises and business fundamentals improve.

Fitch also affirmed the rating on IIFL’s senior secured debt at ‘B+’ with a Recovery Rating of ‘RR4’, and maintained the same rating on its global medium-term note (GMTN) programme.

The agency said the revised outlook “reflects Fitch's expectation of a gradual decline in legacy problem assets over the next two years along with stabilisation of asset quality risks as management pivots the portfolio towards secured lending categories.”

However, Fitch added, “We believe near-term credit costs will remain elevated as management remediates existing problem loans, and rapid loan expansion could stretch risk and control frameworks, and raise operational risks.”

The agency noted it will take time to gauge the robustness of IIFL’s controls as the business scales following the lifting of regulatory restrictions. Fitch was referring to the Reserve Bank of India’s (RBI) ban on the company’s gold loan operations in March 2024, which was lifted in September the same year.

RBI restrictions and subsequent recovery

The RBI had earlier prohibited IIFL Finance from sanctioning, disbursing, or selling any of its gold loans due to supervisory concerns, including deviations in assaying and certifying gold purity and weight, and breaches in loan-to-value ratios. The resumption of operations in September 2024 marked a key turning point for the lender.

Stock performance and technicals

On Thursday, shares of IIFL Finance closed 1.3% lower at Rs 499.65 on the BSE. Despite the decline, the stock has gained 19% so far in 2025 and is up nearly 12% over the past month.

From a technical standpoint, the stock is trading above all eight of its key simple moving averages (5-day through 200-day), underscoring bullish undertones across short- and long-term charts. The Relative Strength Index (RSI) stands at 64.9, indicating the stock is neither overbought nor oversold, while the Moving Average Convergence Divergence (MACD) is at 13.4, above both its center and signal lines, suggesting momentum remains positive.

Also read | Fitch upgrades outlook on IIFL Finance to positive

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