KOCHI: ICL Fincorp, the unlisted Kerala-based gold loan company, is reportedly looking at a possible route to the stock market through a reverse merger involving its listed subsidiary Salem Erode Investments Ltd (SEIL), even as it plans to pump Rs120 crore into the business in FY27.
ICL Fincorp acquired a controlling stake in SEIL in February 2020. The acquisition was aimed at strengthening the group's presence outside Kerala and also providing access to a listed platform for potential future corporate restructuring initiatives, including a proposed reverse merger, according to the latest rating assessment.
The reverse-merger route is not entirely new. At the time of the SEIL acquisition six years ago, ICL management had indicated its intention to use the transaction as a route towards a reverse merger.
Rs120cr infusion plan
ICL plans to infuse around Rs120 crore during FY27 to support business growth, of which Rs32 crore had already been received in the first quarter. The company had raised Rs43.2 crore in FY26 and Rs21 crore in FY25.
ICL Fincorp's consolidated assets under management (AUM) reached Rs960.3 crore in FY26 after growing 48.9 per cent, and crossed Rs1,000 crore in Q1FY27, according to company financials; gold loans constituted 99.5 per cent of consolidated AUM.
NCDs, the major funding source
The company is also seeking to diversify its funding sources. NCDs and subordinated debt accounted for 84.3 per cent of its funding mix at the end of FY26, while bank loans accounted for only 10 per cent. ICL had eight lenders and plans to add more into its fund-raising scheme.
ICL Fincorp's standalone net profit rose to Rs9.13 crore in FY26 from Rs7.16 crore, while consolidated profit increased to Rs4.28 crore from Rs2.44 crore. Consolidated gross NPA improved to 0.57 per cent from 1.09 per cent.
While the latest assessment does not indicate a timeline for the proposed reverse merger, the reference to the listed platform assumes significance as ICL Fincorp crosses the Rs1,000-crore AUM mark and prepares for another sizeable capital infusion.
