IIFL Finance share price jumps 8% after Fairfax liquidity support: Top updates

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IIFL Finance share price: IFL Finance shares recovered today (March 7) as they rose over 8 per cent after falling 35 per cent in the last two sessions following the Reserve Bank of India's (RBI) decision to stop the company from issuing gold loans. This comes after IIFL Finance said that Canadian billionaire Prem Watsa-backed Fairfax India Holdings Corporation agreed to provide $200 million liquidity support to the company.

IIFL Finance share price: Check latest IIFL Finance share price here

Fairfax India, that holds stakes in IIFL Finance and other IIFL group companies, said in a statement, “The RBI's embargo has raised liquidity concerns amongst the company's investors and lenders. In response to these concerns, Fairfax India has agreed to invest up to $200 million of liquidity support on terms to be mutually agreed upon and subject to applicable laws, including regulatory approvals (if any).”

At 9:30am, IIFL Finance shares traded at ₹409.80 on the National Stock Exchange which was up 7.2 per cent from the previous close.

In the past one year, the stock has fallen 9 per cent. On March 6, the stock exchanges revised the circuit limit downwards for IIFL Finance to 10 per cent from 20 per cent.

Brokerage firm Jefferies downgraded IIFL Finance to 'hold' from ‘buy’ while cutting the target price to ₹435 per share from ₹765 earlier.

Jefferies said, "The RBI's order can dent earnings due to rapid unwinding of profitable gold loan book. Given the time of lifting of the ban is uncertain and we assume that the ban would stay for 9 months, we expect assets under management (AUM) to fall 1 percent YoY and 51 percent YoY fall in gold AUM in FY25.”