Thu Feb 12 03:20:00 UTC 2026: ### IIFL Finance Re-Engineers Growth Strategy, Eyes Secured Lending Leadership

The Story: IIFL Finance is undergoing a significant strategic overhaul, shifting its focus from high-risk, unsecured lending towards a more stable, secured retail platform. According to a recent Motilal Oswal research report, the company is concentrating on three core businesses: gold loans, affordable housing finance, and a stabilized microfinance business. This repositioning involves exiting unsecured MSME, digital personal loans, micro-LAP, and fintech partnership-led portfolios. Analysts at Motilal Oswal project a consolidated AUM/PAT CAGR of approximately 20%/32% over FY26–FY28, with an estimated RoA/RoE of 2.6%/16.5% in FY28. They maintain a “BUY” rating on the stock with an unchanged target price of INR720.

Key Points:

  • IIFL Finance is repositioning from unsecured lending to a secured retail platform.
  • Core growth engines are now gold loans, affordable housing finance, and microfinance.
  • Unsecured MSME, digital personal loans, and other high-risk portfolios are being exited.
  • Motilal Oswal projects a 20%/32% AUM/PAT CAGR over FY26–FY28.
  • “BUY” rating maintained with a target price of INR720.

Critical Analysis:
The events suggest a proactive and well-thought-out strategy by IIFL Finance, supported by positive external validations (MarketsMOJO’s “Buy” rating and positive outlook on borrowing headroom). The shift towards secured lending likely aims to mitigate risk and improve stability in a volatile financial environment.

Key Takeaways:

  • IIFL Finance is prioritizing stability and sustainable growth through secured lending.
  • The company is divesting from higher-risk portfolios to streamline operations.
  • Analyst confidence remains high, reflected in the maintained “BUY” rating.
  • Gold loans and affordable housing are positioned as key drivers of future growth.
  • Increased borrowing headroom is likely supporting IIFL Finance’s bullish outlook.

Impact Analysis:

This strategic shift could have a lasting impact on IIFL Finance’s performance and market position. By focusing on secured lending, the company aims to attract a more risk-averse investor base and achieve more predictable and reliable earnings. The expansion in gold loans and affordable housing finance will not only contribute to revenue growth but could also make home ownership more accessible to a wider population, if managed correctly and responsibly. Successful execution of this strategy could establish IIFL Finance as a leader in the secured retail lending space.

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