In a dramatic turn of events, IIFL Finance, a prominent non-banking financial company (NBFC) specializing in gold and business loans, has announced a staggering multifold increase in its net profit for the December quarter, even as its stock price took a severe hit following a directive from the Income Tax Department.
Impressive Q3 Financial Performance
The company reported a net profit of ₹501 crore for the third quarter ended December 31, 2025, a remarkable surge from ₹82 crore in the same period a year ago. This represents a growth of over six times, highlighting robust operational performance despite challenging market conditions.
Strong Growth Across Loan Segments
IIFL Finance demonstrated significant momentum in its gold loan portfolio, with assets under management (AUM) nearly tripling to ₹43,432 crore. This growth was supported by healthy tonnage expansion and stable asset quality, underscoring the company's dominant position in the gold lending space.
Other loan segments also showed varied performance:
- Home loan AUM grew 5% year-on-year to ₹31,893 crore
- MSME loan AUM increased 17% to ₹10,081 crore
- Microfinance loan AUM declined 19% to ₹8,360 crore
Income Tax Audit Directive Sparks Market Concern
Simultaneously, IIFL Finance disclosed that the Income Tax Department has directed the company to undergo a special audit of its accounts for a specified block period under Section 142(2A) of the Income Tax Act, 1961. The directive, dated January 21, 2026, requires the appointment of a special auditor for this purpose.
In a regulatory filing, the company clarified that this communication is procedural in nature and connected to ongoing assessment proceedings. There is no adjudication or determination against the company at this stage, and the financial impact remains unascertained.
Additional GST Penalties
Compounding the regulatory challenges, IIFL Finance has received two separate orders from the Goods and Services Tax departments of Bihar and Gujarat, imposing penalties totaling over ₹13 crore. These developments have added to investor apprehensions about the company's regulatory compliance framework.
Market Reaction and Stock Performance
Investors reacted sharply to the news, with shares of IIFL Finance plummeting 13.15% to close at ₹540.80 apiece on the Bombay Stock Exchange (BSE). This significant decline reflects market concerns about the potential implications of the tax audit directive and GST penalties on the company's future operations and financial health.
Management's Forward-Looking Statement
Nirmal Jain, Founder and Managing Director of IIFL Finance, expressed confidence in the company's strategic direction. "Going forward, our AI-led operating framework, phygital distribution network, and strong risk and compliance discipline will remain central to delivering consistent performance and long-term value creation," he stated.
The company's emphasis on technology-driven operations and hybrid distribution channels suggests a focus on sustainable growth despite the current regulatory headwinds.
