Shares of IIFL Finance Ltd. are down as much as 9% on Thursday, April 23, and have declined in three out of the last four trading sessions. The stock is also the top loser on the Nifty 500 index.
This is the biggest single-day fall that IIFL Finance has seen in nearly the last three months. The stock was down 10.5% on February 1 this year, the day of the Union Budget.
The stock is also declining on strong volumes, which are significantly higher than its 20-day average. As many as 43 lakh shares of IIFL Finance have changed hands so far, compared to the 20-day average of 7.5 lakh shares at this time of the day.
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In January this year, the Income Tax Department had directed the company to undertake a special audit of its accounts for a specified block period under Section 142(2A) of the Income Tax Act.
IIFL Group founder Nirmal Jain had earlier termed the issue “a complete misunderstanding,” adding that the order under Section 142(2A) is procedural and typically invoked for complex accounts.
He explained that such audits are common in businesses with large and complex operations, particularly in segments like gold loans, where the company services over 6.5 million customers.
Jain added that the company has already completed reassessments for the relevant period and paid a nominal additional tax of around ₹1.2–1.3 crore.
“We are 100% confident that there’s no extra, no further liability we expect on this account,” Jain had said in an interaction with CNBC-TV18, while emphasising that the audit runs parallel to standard tax assessment procedures.
The scrutiny also follows earlier regulatory actions, including restrictions imposed by the Reserve Bank of India on IIFL’s gold loan business in 2024, which were subsequently lifted.
With today’s fall, the stock has turned negative for the month of April. Shares had delivered negative returns in the first three months of the year as well.