Shares of IIFL Finance surged more than 8% in Wednesday’s trade after the company clarified that it would legally challenge a tax demand order and does not expect any material impact on its financial position or business operations.
The stock climbed as much as 8.5% intraday to hit a high of ₹493.20 on the NSE before trading around ₹483.55, up nearly 8.5% from the previous close.
The rally came after the company addressed assessment orders received from the Joint Commissioner of Income Tax on May 12, 2026. The orders relate to a block assessment period spanning nearly seven years, from April 1, 2018 to February 3, 2025.
According to the disclosure, the total tax demand raised by the authority amounts to ₹475.56 crore.
In its response, IIFL Finance stated that it has complied with all applicable tax obligations and believes it has strong factual as well as legal grounds to challenge the assessment order. The company added that it does not foresee any material adverse impact on its financial health or operational activities due to the development.
Management also confirmed that it is evaluating all available legal remedies and intends to file appeals under the relevant provisions of tax law.
The clarification appeared to reassure investors, with the stock recovering strongly despite the sizeable demand amount. Market participants interpreted the company’s confidence in defending its case and its assertion of no operational disruption as a positive signal.
IIFL Finance is one of India’s leading non-banking financial companies (NBFCs), offering services across gold loans, home loans, microfinance, business loans and capital market products. The company has been actively focusing on strengthening asset quality, expanding secured lending and improving operational efficiency over the past few quarters.
The stock has remained in focus in recent months amid broader investor interest in financial services and NBFC counters, especially after regulatory developments and improving credit growth trends across the sector.
Meanwhile, analysts continue to monitor the legal proceedings and any further disclosures related to the tax matter in the coming quarters.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice.