Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AA-/Stable/Crisil A1+’ ratings on bank facilities and commercial paper of IIFL Capital Services Limited (IIFL Capital, erstwhile IIFL Securities Limited).

 

The rating continues to reflect the strong market position of IIFL Capital in the broking and investment banking businesses and its adequate capitalisation. These strengths are partially offset by exposure to uncertainties inherent in capital market-related businesses.

 

The company has served over 30 lakh customers, out of which 4.2 lakh customers were active as on June 2025. Out of total turnover volume (cash and derivatives segments) of the National Stock Exchange , the company has maintained an overall market share at 0.63%, and 2.55% in the cash segment as on June 2026, Average daily turnover decreased to Rs 2.8 lakh crore for fiscal 2025 as compared to Rs 2.9 lakh crore in fiscal 2024 decreased to Rs 2.4 lakh crore in first six months of fiscal 2026, in line with industry trends.

Analytical Approach

For arriving at the rating, Crisil Ratings has combined the business and financial risk profiles of IIFL Capital and its subsidiaries. The rating also factors in the business synergies between IIFL IIFL Capital, IIFL Finance Ltd (IIFL Finance) given their common promoters and shared brand.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

Strong market position in the retail broking and investment banking businesses

IIFL Capital is primarily into broking and allied activities such as margin trading facility (MTF), depository, retail brokerage, etc. (71% of total income), financial product distribution (20%) and investment banking (9%) for FY2025. It is one of the leading players in the retail broking segment. The company has a pan-India presence with more than 4.19 lakh active clients as on June 30, 2025. It had a market share of 0.63% of the turnover volume (cash and derivatives segments) of the National Stock Exchange (NSE) for the first quarter of fiscal 2026. It also provides MTF to its clients and the net book was Rs 1,514 crore as on September 30, 2025.

 

The company also has a strong institutional equity desk, and is a leading domestic investment banker, participating in several marquee initial public offerings (IPOs) and qualified institutional placements. In fiscal 2025, owing to decent traction in the investment banking space, revenue from this segment increased to Rs 238 crore in fiscal 2025 from Rs 225 crore in fiscal 2024. With deals getting more traction in the current fiscal, revenue from the segment stood at Rs 57 crore in first quarter of fiscal 2026.

 

The company also distributes third-party financial products such as insurance, mutual funds, bonds, alternative investment funds, portfolio management services, and deposits through its website, mobile app and branch network. Distribution assets under management (AUM) stood at around Rs 35,700 crore as on June 30, 2025, and income from distribution was Rs 145 crore during first quarter of fiscal 2026. Other businesses, such as currency and commodity broking businesses are modest in scale.

 

Overall, the business profile is fairly diversified which has supported steady revenue flow over the years.

 

Adequate capitalisation supported by healthy internal accruals

Consolidated networth for the company was Rs 2,815 crore as on September 30, 2025 (Rs 2,510 crore as on March 31, 2025, and Rs 1,788 crore as on March 31, 2024) supported by healthy internal accruals. In the past, a large portion of the borrowing was by the wholly owned subsidiary, IIFL Facilities Services, which was secured by the subsidiary's various real estate assets. Now, with the scale up of MTF book, borrowings at the broking entity are expected to increase. The MTF book (net) stood at Rs 1,514 crore as on September 30, 2025 (Rs 931 crore in March 2025 and Rs 916 crore in March 2024). Overall gearing was 0.6 times as on September 30, 2025 (0.4 times as on March 31, 2025, and 0.6 times as on March 31, 2024).

 

IIFL Capital on a consolidated basis reported a net profit of Rs 713 crore in fiscal 2025 vis-à-vis Rs 513 crore in fiscal 2024. The earnings performance continued to remain robust with a net profit of Rs 261 crore in the first six months of fiscal 2026 driven by improvement in market sentiment and investment banking deals though marginally decreased broking volumes. The 3-year average cost to income ratio was 67% for fiscal 2023 to fiscal 2025. Healthy internal accruals have supported the capital position of the company which is expected to remain adequate over the medium term.

Key Rating Drivers - Weaknesses 

Exposure to uncertainties inherent in the capital market businesses and tightening regulatory environment

The company's key broking business remains exposed to economic, political, and social factors that drive investor sentiments. Given the cyclical nature of the business, brokerage volumes and earnings are highly dependent on the level of trading activity in capital markets. This makes earnings and profitability volatile. However, the impact on earnings is partially offset by the high share of business coming through franchisees, resulting in a more variable cost structure.

 

Over the past couple of years, the broking industry has witnessed a dynamic regulatory environment. With the objective of enhancing transparency, limiting misuse of funds and safeguarding investor interests, Securities and Exchange Board of India (SEBI) has introduced several changes. Some of these include margin pledge/re-pledge mechanism, daily client collateral reporting and disclosure, collateral allocation at clearing corporations by brokers, and upfront margin collection for intraday positions.

 

With increasing compliance intensity, associated costs are expected to increase. Crisil Ratings understands that most large brokers and some mid-sized companies, including IIFL Capital have streamlined their systems in accordance with the revised regulations. However, this could impact small and mid-sized brokers with not-so-advanced IT infrastructure and risk management systems. Fundamentally, while these revised regulations will benefit the broking industry in the long term by increasing transparency and lowering risks for customers, the changes do increase the compliance costs for brokers and require them to adapt their business models to keep pace.

 

SEBI had placed a ban on IIFL Capital to acquire new broking clients for two years as per an order dated June 19, 2023, based on various inspections carried out over 2011-17. Subsequently the company approached the Securities Appellate Tribunal (SAT) and obtained a stay order on June 27, 2023. On December 07, 2023, SAT has set aside SEBI’s ban on IIFL Capital on acquiring new clients and reduced the penalty amount. SEBI has now appealed against the SAT order before the Supreme Court.

Liquidity Strong

IIFL Capital, at a consolidated level, has strong liquidity. As on August 31, 2025, consolidated liquidity stood at Rs 1,062 crore in the form of cash and equivalent (Rs 905 crore and unutilized bank lines (Rs 157 crore) while debt repayments over September 2025 – February 2026 stand at Rs 961 crore. The debt repayments of Rs 961 crore are in the form of commercial paper (CP; Rs 300 crore) and working capital demand loan (WCDL; Rs 650 crore). WCDL is secured against receivables, which along with CP, are typically rolled over.

Outlook Stable

IIFL Capital will continue to strengthen its market position and improve its earning profile and core profitability over the medium term.

Rating sensitivity factors

Upward factors

• Significant scale-up of operations leading to improvement in the market position across business segments
• Continued improvement in revenue, and cost to income improving to 55%, together resulting in significant improvement in profitability
• Improvement in income diversity on a sustained basis

 

Downward factors

• Impact on business profile as indicated by drop in market share thereby impacting broking income
• Weakening of the earnings profile or sustained increase in cost-to-income ratio to over 80%

About the Company

IIFL Capital (formerly IIFL Securities Limited, the erstwhile flagship company of the India Infoline group, was set up as Probity Research and Services in October 1995. The name was changed to India Infoline Ltd in March 2000, then to IIFL Securities in May 2018 and currently as IIFL Capital in November 2024) . The company is a member of the BSE and the NSE. IIFL Commodities Ltd (formerly India Infoline Commodities Ltd; a 100% subsidiary of IIFL Capital) sold a major part of its business in a slump sale to IIFL Capital, effective July 1, 2018.

 

In January 2018, IIFL Finance (earlier IIFL Holdings Ltd) reorganised itself into three entities: IIFL Finance (the loans and mortgages business), 360 One (the wealth and asset management business) and IIFL Capital (the capital markets and other businesses). Subsequently in September 2019, IIFL Capital was listed on the stock exchanges.

 

As on June 30, 2025, the promoters owned 31% stake in IIFL Capital. The Fairfax group owns 31% and the remaining 38% is held by the public.

 

On a consolidated basis, IIFL Capital reported total income and profit after tax (PAT) of Rs. 2,567 crore and Rs 713 crore, respectively, in fiscal 2025, against Rs 2,231 crore and Rs 513 crore, respectively, in fiscal 2024. During the first six months of fiscal 2026 total income and PAT were Rs 1,228 crore and Rs 261 crore respectively.

 

On a standalone basis, IIFL Capital reported total income and PAT of Rs 2,159 crore and Rs 603 crore, respectively, in fiscal 2025, against Rs 1,966 crore and Rs 535 crore, respectively, in fiscal 2024. During the first six months of fiscal 2026 total income and PAT were Rs 1,066 crore and Rs 250 crore respectively.

Key Financial Indicators

IIFL Capital - consolidated (Crisil Ratings-adjusted numbers)

As on / for the period ended		H1 FY2026	FY2025	FY2024	FY2023
Total assets	Rs crore	9,091	7,956	7,875	5,237
Total income	Rs crore	1,228	2,567	2,231	1,370
Profit after tax	Rs crore	261	713	513	250
Return on equity	%	19.6*	33.2	32.7	19.7
Gearing	Times	0.6	0.4	0.6	0.4

*Annualised

 

IIFL Capital - standalone (Crisil Ratings-adjusted numbers)

As on / for the period ended		H1 FY2026	FY2025	FY2024	FY2023
Total assets	Rs crore	8,510	7,401	7,452	4,805
Total income	Rs crore	1,066	2,159	1,966	1,269
Profit after tax	Rs crore	250	603	535	283
Return on equity	%	21.1*	31.5	38.8	27.0
Gearing	Times	0.6	0.4	0.6	0.3

*Annualised

Any other information: Not applicable