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Market Rally Amid Tax Dispute
The market reacted positively to IIFL Finance's announcement that it will vigorously contest a ₹476 crore income tax demand notice. The company's shares jumped as much as 11% intraday, ultimately closing 4.31% higher at ₹464.25. This surge suggests investors are pricing in the removal of a significant regulatory overhang.
Company's Stance on Tax Demand
Nirmal Jain, founder and managing director of IIFL Finance, emphasized the company's belief in its "strong factual and legal grounds" to dispute the demand. He confirmed that appeals would be filed within legal timelines. The demand notice covers the period between April 1, 2018, and February 3, 2025. The assessment proceedings are now considered concluded, which Jain indicated was a key factor driving the stock's upward movement despite broader market flatness.
Strong Financial Performance
Underpinning investor confidence are IIFL Finance's recently announced Q4 FY26 results. Profit after tax soared 148% year-on-year to ₹623.2 crore, a substantial increase from ₹251.4 crore in the prior year. This growth was fueled by strong operating performance and improved asset quality. Assets Under Management (AUM) also demonstrated robust expansion, rising 38% year-on-year to ₹1.08 trillion as of March 31, 2026.
Growth Outlook
Jain remains optimistic about India's economic outlook, citing strong domestic consumption, stable financial markets, and healthy credit demand. While acknowledging global geopolitical uncertainties, he expressed confidence in the company's growth trajectory, particularly noting the continued strength in its gold loan business driven by customer demand, expanding distribution, and disciplined execution.