The agency has also affirmed IIFL Finance's medium-term note programme (MTN) at 'B+'.

The 'positive' outlook reflects Fitch's assessment of management's progress in resolving legacy problem assets, and its expectation of more meaningful improvement over the next two years in light of management's efforts and India's generally supportive operating conditions.

It also reflects that Fitch does not expect a major deterioration in IIFL Finance's risk profile or financial metrics, some of which are already consistent with a higher rating.

IIFL Finance is one of the leading retail focused diversified NBFC in India, engaged in the business of loans and mortgages along with its subsidiaries - IIFL Home Finance and IIFL Samasta Finance. IIFL Finance, through its subsidiaries, offers a wide spectrum of products such as home loan, gold loan, business loan, microfinance, capital market finance and developer & construction finance to a vast customer base of over 8 million+ customers. IIFL Finance has widened its pan-India reach through extensive network of branches spread across the country and various digital channels.

The company had reported 29% rise in consolidated net profit to Rs 425.40 crore on a 20% increase in total income to Rs 2370.70 crore in Q1 FY24 over Q1 FY23.