BackFederal Bank gives its nod to FedFina’s IPO
FedFina’s IPO will include a fresh issue and offer for sale, subject to market conditions and approvals from SEBI
PremiumMUMBAI : The spurt of initial share sales in India in 2021 is set to continue this year with the board of Federal Bank approving on Tuesday a plan to publicly list its subsidiary Fedbank Financial Services (FedFina).
Separately, organic food company Sresta Natural Bioproducts Ltd has filed draft papers with the Securities and Exchange Board of India (Sebi) to raise ₹500 crore through an initial public offering (IPO).
FedFina is the retail focused non-banking finance company (NBFC) of the Kerala-based lender. The IPO will comprise a fresh issue and an offer for sale (OFS), subject to market conditions and Sebi approval, Federal Bank said in a regulatory filing. It said details such as the IPO size as well as the OFS will be decided at a later stage.
Mint was the first to report on Federal Bank’s plan on 19 October.
FedFina will remain a unit of Federal Bank post the public listing, the bank said. FedFina, which received its NBFC licence in 2010, has more than 435 branches across the country, offering gold loans, home loans, loans against property and business loans.
In 2018, homegrown private equity fund True North bought 26% in FedFina for around ₹400 crore.
FedFina’s assets under management totalled ₹4,863 crore as of March-end, according to its website, with retail loans comprising 96% of the loan book. The company reported gross non-performing assets and net non-performing assets of 1.04% and 0.71% respectively at the end of March.
Separately, Sresta Natural’s IPO will comprise a fresh issue of ₹50 crore and an OFS of up to 7,030,962 equity shares by the selling shareholders, according to the draft prospectus. The Hyderabad-based company owns packaged organic food segment ‘24 Mantra’.
According to market sources, the IPO size is expected to be about ₹500 crore.
The company plans to use net proceeds from the fresh issue to fund working capital requirements, repay debt and for general corporate purposes.
Incorporated in 2004 by co-founder and managing director, Rajashekar Reddy Seelam, Sresta Natural manufactures and sells organic food products. The company has operations in 34 countries as of last September.
The copy includes PTI inputs.
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