Fedbank Financial Services has announced the price band for its upcoming initial public offering (IPO) at Rs 133-140 which opens on November 22, Wednesday and closes on November 24, Friday. The company will be raising Rs 1,092 crore at the upper price band via the public offer.
Retail investors can subscribe to a minimum of one lot comprising 107 shares and in multiples thereof. The minimum bid amount is Rs 14,980. The quota for retail investors has been kept at 35% of the net offer.
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Meanwhile, for non-institutional investors (NIIs), the reserved portion is 15% and for qualified institutional buyers, it is 50%.
The Federal Bank arm IPO consists fresh equity issue worth Rs 600 crore along with an offer for sale (OFS) comprising 35,161,723 equity shares.
Under the OFS, 1.64 crore equity shares will be offloaded by Federal Bank and 5.38 crore shares by True North Fund VI LLP.
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The company proposes to utilise the net proceeds from the fresh issue towards augmenting Tier–I capital base to meet its future capital requirements, arising out of the growth of business and assets. A part of the proceeds will also be used for meeting offer expenses.
Fedbank Financial is one of the five private bank-promoted NBFCs in India. It focuses on catering to the MSMEs and the emerging self-employed individuals sector.
It is also the fastest-growing gold loan NBFC in India among its peers. It has the second lowest cost of borrowing among the MSMEs, gold loan and MSME and gold loan peer set in India in FY23.
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As of March 2023, the company boasts of the third fastest AUM growth among NBFCs in India with a three-year CAGR of 33% between FY20-23. Nearly 86% of the total loan assets are secured against tangible assets, namely gold or a customer’s property.
For the year ended March 2023, revenue from operations stood at Rs 1,178.8 crore, while net profit was at Rs 1,801 crore.
The book-running lead managers for the issue are ICICI Securities, BNP Paribas, Equirus Capital and JM Financial while the registrar is Link Intime India Pvt Ltd.
