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Business News/ Markets / Ipo/  FedFina IPO: Federal Bank revives issue plans
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FedFina IPO: Federal Bank revives issue plans

Fedbank Financial Services (FedFina), the non-banking financial arm of Federal Bank, has revived plans for an IPO, subject to market conditions and approvals.

FedFina IPO will be undertaken by way of fresh issues and offer for sale. (Reuters)Premium
FedFina IPO will be undertaken by way of fresh issues and offer for sale. (Reuters)

Fedbank Financial Services Limited (FedFina), the non-banking financial arm of Federal Bank, has revived plans of raising funds through an initial public offering (IPO). In a BSE filing on Monday (July 17), Federal Bank announced that the board of directors of FedFina proposed an initial public offering at its meeting held on July 17, 2023.

The IPO will be undertaken by way of fresh issues and offer for sale (OFS), subject to market conditions and receipt of applicable approvals including that of the Securities and Exchange Board of India (SEBI) and other considerations.

"The size of the IPO, the portion of the offer for sale, price and other details with respect to the proposed IPO by FedFina will be informed in due course after the finalisation of the same in consultation with the book running lead managers," said Federal Bank in its exchange filing. After the IPO, FedFina would continue to be a subsidiary of Federal Bank.

FedFina filed a Draft Red Herring Prospectus (DRHP) for an IPO last year. However, the company pulled out of it as it found the market conditions unfavourable. Now the company is reconsidering capital raising options after the lapse of earlier received regulatory approval.

“The company had filed a Draft Red Herring Prospectus (DRHP) last year and was exploring a capital raise but the markets were not that friendly at that point in time," Federal Bank's chief executive Shyam Srinivasan said on Thursday while announcing the bank’s Q1 financial results.

He said the company, in which the bank holds a 74 per cent stake, was performing well and the bank will continue to be a majority shareholder. “We have a resolution by the board that we will remain a majority investor as long as the regulations permit," he said.

Read more: Federal Bank arm Fedfina reconsidering capital raising options, says CEO Srinivasan

Fedbank Financial Services received its NBFC license in 2010 and has over 463 branches catering to gold loans, home loans, loan against property and business loans.

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Published: 18 Jul 2023, 08:53 AM IST
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