India’s capital markets may soon see two high-profile spin-offs as IIFL Finance and Mahindra & Mahindra signal plans to list key subsidiaries. While IIFL is evaluating an IPO of its housing finance arm in the near term, Mahindra is charting a medium-term listing of its electric three-wheeler business—both moves underscoring a broader trend of monetising mature, scalable verticals.
IIFL Home Finance IPO Back on the Table
Non-bank lender IIFL Finance has indicated that its board may consider planning IIFL Home Finance IPO over the next 3–6 months, according to founder and managing director Nirmal Jain.
Jain emphasised that any listing decision would be treated as material information and formally disclosed to exchanges once deliberated at the board level. Importantly, IIFL Home Finance already has an external shareholder, with Abu Dhabi Investment Authority holding 20%, while IIFL Finance owns the remaining 80%—a structure that naturally lends itself to a public-market transition.
Scale and Performance
- IIFL Home Finance AUM (Q3FY26): INR 39,628 crore
- IIFL Samasta Finance AUM (microfinance arm): INR 9,681 crore
- IIFL Finance consolidated AUM: INR 98,336 crore (+38% YoY)
- Q3FY26 net profit: INR 501 crore (over six-fold YoY increase)
Beyond the IIFL Home Finance IPO, IIFL is also exploring onboarding new investors into IIFL Samasta Finance, which is currently wholly owned. Management noted that the microfinance sector has emerged from a cyclical trough, making it an opportune time to engage strategic or financial partners, though no divestment talks are currently underway.
The optimism comes despite a recent bout of volatility in IIFL Finance’s stock, which fell up to 15% after the company disclosed a special income-tax audit for a specified block period. Jain downplayed the risk, calling the audit procedural and linked to transaction-level data reviews, particularly in gold loans. He stated that management does not expect penalties or additional tax liabilities, framing the audit as a step that could bring closure rather than uncertainty.
Growth Outlook
With the Reserve Bank of India lifting restrictions on IIFL’s gold loan business, management sees operating leverage returning. Gold loan AUM rebounded sharply, while mortgages and loans against property are expected to gain momentum in coming quarters. Historically, IIFL has delivered ~20% RoE, and Jain indicated scope for expansion as fixed costs get absorbed by a growing loan book. The NBFC is targeting 20–25% AUM growth and plans to raise INR 1,000–1,500 crore via NCDs in February to support expansion.
Mahindra Last Mile Mobility IPO Slated for 2027
At the other end of the IPO spectrum, Mahindra & Mahindra has announced plans to list its electric three-wheeler (e3W) business, Mahindra Last Mile Mobility IPO by 2027, as part of a long-term electric mobility strategy. Group CEO and MD Anish Shah unveiled the plan during the World Economic Forum in Davos, positioning the IPO as a value-unlocking and growth-funding exercise.
Mahindra Last Mile Mobility has reached a level of operational maturity that allows it to scale independently. Once a non-player in conventional three-wheelers, Mahindra today commands an estimated 40–45% market share in electric three-wheelers—making it one of the strongest franchises in India’s last-mile EV ecosystem.
Key metrics and targets include:
- EV share of Mahindra volumes: ~7% currently
- Medium-term target: 20–30% of total volumes
- IPO proceeds: To be deployed for future growth, including international expansion
Shah highlighted that while adoption is accelerating, charging infrastructure—especially on highways—remains a bottleneck, potentially influencing the pace of EV penetration. Nonetheless, the group views electric mobility as a structural, long-term opportunity rather than a cyclical bet.
Final Words
Market participants are also tracking these spin-offs for possible shareholder quota opportunities, as listings of subsidiaries often come with preferential allotment for existing parent shareholders, if structured accordingly. Taken together, the IIFL and Mahindra announcements point to a common strategic thread: capital efficiency through focused listings.
- IIFL Finance is looking to crystallise value from a seasoned housing finance platform at a time when asset quality is stabilising, secured lending is dominant, and profitability is rebounding.
- Mahindra & Mahindra, meanwhile, is ring-fencing a high-growth EV vertical, allowing investors to independently price its electric mobility potential without diluting the parent’s diversified industrial narrative.
For markets, these signals reinforce confidence that India Inc. is becoming more deliberate about timing, structure, and rationale behind IPOs—favouring mature assets with clear growth runways rather than opportunistic listings.
If executed well, both transactions could broaden sectoral depth in the equity markets: one strengthening the financial services bench via housing finance, the other deepening exposure to electric mobility and last-mile logistics.
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