IIFL Finance eyes recovery in 2026 as gold loan ban lifts and digital lending gains pace

After a difficult 2025 marked by regulatory headwinds and muted growth, India’s IIFL Finance (NSE: IIFL) is expected to rebound sharply in fiscal 2026, as analysts forecast double-digit growth across key lending segments.

The non-banking financial company was temporarily barred by the Reserve Bank of India in early 2024 from issuing new gold loans due to concerns over gold purity checks and weight certification. Although the restriction was lifted in September 2024, the impact lingered. Gold loans—which make up about 27% of IIFL’s total assets under management (AUM)—declined by -10% for the year, contributing to a -0.8% contraction in overall AUM.

That trend is expected to reverse. Consensus estimates from Visible Alpha project total AUM to rise +18% year-on-year to ₹923 billion in 2026. The gold loan portfolio is forecast to rebound +26% to ₹265.4 billion as operations normalize and regulatory pressure eases.

Home loans, IIFL’s largest segment, are projected to see AUM grow +15% to ₹363.2 billion, providing a stable base. The group’s focus on digital lending is also bearing fruit, with digital loan AUM expected to surge from ₹2.4 billion in 2025 to ₹73 billion in 2026, and further to ₹93.5 billion in 2027—an increase of +28% year-on-year. Digital loans represented just 0.3% of AUM in 2025; analysts expect this share to rise to 8.6% by 2027, reflecting growing demand for fast, technology-enabled credit.

Meanwhile, the company’s microfinance arm, Samsata, is set to recover in 2026, supported by improved liquidity and falling funding costs.

Total income is projected to grow +18% to ₹71.9 billion in 2026, following an -8% decline in 2025. This will be driven by a +14% increase in net interest income, alongside a significant rebound in non-interest income.