Fedbank Financial Services IPO to open on Nov 22 at Rs 133-140 per share

The initial public offering (IPO) of Fedbank Financial Services (Fedfina) will open for subscription on November 22 at a price band of Rs 133-140 per share, the company announced on Friday. The three-day offering will close on November 24. 

At the upper end of the price band, the Federal Bank-promoted company will mop up Rs 1,092.26 crore to augment the company's Tier-I capital base to fund growth of the business and assets.

The lost size has been fixed as a minimum  bid for 107 equity shares and in multiples of 107 shares thereafter.

According to the company's prospectus, the initial public offering comprises a fresh issuance of shares worth Rs 600 crore by the company, and an offer-for-sale (OFS) for 35 million equity shares.

The Federal Bank will be selling 5.47 million shares in the OFS, and the rest of shares will be sold by investor True North Fund VI LLP, the private equity fund.

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Fedbank Financial Services is a subsidiary of The Federal Bank Ltd, which provides gold loans, home Loans, loan against property (LAP), and business loan services. The company's clientele comes mainly from the MSME and emerging self-employed individuals (ESEI) sectors.
 

Fedbank Financial Services has reserved shares worth Rs 10 crore for its employees, who will get these shares at a discount of Rs 10 per share to the final offer price.

Excluding this, half of the remaining offer is reserved for qualified institutional buyers (QIBs), 15 per cent for high networth individuals (HNIs), and the remaining 35 per cent for retail investors.

Financial snapshot

As per the draft red herring prospectus (DRHP), Fedfina's net profit has soared from Rs 61.68 crore at the end of March, 2021 to Rs 180 crore at the end of March 2023. Its assets stood at Rs 9,071 crore at the end of the previous financial year, up from Rs 5,466.31 crore at the end of FY21 Rs 6,555.71 crore at the end of FY22. 

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It's revenue, too, has nearly doubled to Rs 1,214.68 crore from Rs 697.5 crore at the end of March 2021.