Fedfina fin serv announces Rs 1,092cr IPO

Mumbai: Fedbank Financial Services (Fedfina) on Friday said it plans to raise up to Rs 1,092-crore through an initial public offering opening on November 22.

The Reserve Bank’s circular increasing the risk weights on unsecured lending will increase the borrowing costs, but the negative market sentiment will not impact the offering, Managing Director and Chief Executive Officer Anil Kothuri told reporters here.

Fedfina, a subsidiary of south-based Federal Bank, has set a price band of Rs 133-140 per share for the issue which comes amid a raft of other issuances before the holiday season and the next year’s general elections. The issue will open for three days starting November 22. The offer consists of fresh issue of Rs 600 crore, while the rest is offer for sale under which existing shareholders, including Federal Bank and homegrown private equity fund True North are exiting. Kothuri said that post issue, Federal Bank’s overall holding will come down to 61 per cent from the present 73 per cent, while True North’s holding will come down to 8.5 per cent from the present 25 per cent.

The new investors will hold over 31 per cent of shares post-issue. True North had first invested in the company in November 2018 at Rs 42 per share, while the last fund raising by the company was a rights issue in November 2021, when shares were subscribed at Rs 70, Kothuri said.