Fedbank Financial Services IPO set to open on November 22; price band fixed at Rs 133-140/share

20 Nov 2023 , 10:07 AM

Fedbank Financial Services, a prominent non-banking finance company (NBFC), is set to make waves in the financial market with its upcoming initial public offering (IPO). The Mumbai-based firm has announced a public issue with a subscription period from November 22 to November 24, offering shares in the price band of Rs 133-140. 

• Key Details of the IPO: The public issue comprises a fresh issuance of shares worth Rs 600 crore and an offer-for-sale (OFS) of 3.5 crore equity shares, totaling Rs 492.26 crore at the upper price band. The OFS includes the sale of 54.74 lakh shares by the promoter, The Federal Bank, and the remaining shares by the private equity fund, True North Fund VI LLP.
• Utilization of Proceeds: Fedbank Financial Services plans to utilize the net proceeds from the fresh issue to strengthen its Tier – I capital base. This strategic move aims to meet future capital requirements, driven by the company’s anticipated business and asset growth.
• Employee Incentives: In a commendable gesture, the company has reserved Rs 10 crore worth of shares in the IPO for its employees. These shares will be offered at a discounted rate of Rs 10 per share compared to the final offer price.
• Issue Allotment and Listing Date: The allotment for the IPO is expected to be finalized on November 30, 2023. Fedbank Financial Services is scheduled to list on both BSE and NSE, with a tentative listing date fixed for Tuesday, December 5, 2023.
• Investment Opportunities: Investors can participate in the IPO by bidding for a minimum of 107 equity shares, with subsequent multiples of 107 shares. The net offer size is divided into allocations for qualified institutional buyers (50%), high net worth individuals (15%), and retail investors (35%).
• Retail Investor Details: For retail investors, the minimum investment is set at Rs 14,980 (107 shares), with a maximum investment capped at Rs 1,94,740 (1,391 shares). This provides a lucrative opportunity for individual investors to be a part of Fedbank’s growth story.
• Fedbank Financial Services Overview: As a retail-focused NBFC, Fedbank specializes in providing Gold Loans, Home Loans, Loan Against Property (LAP), and Business Loan Services. The firm, majority-owned by Federal Bank, boasts a 72 percent shareholding, with True North Fund VI LLP holding 25.3 percent shares.
• Market Position: Fedbank distinguishes itself with the second-lowest cost of borrowing among MSMEs, gold loan, and MSME & gold loan peer set in India for Fiscal 2023. The company’s clientele primarily consists of MSMEs and emerging self-employed individuals (ESEI) sectors.
• Merchant Bankers: The IPO is backed by reputed merchant bankers, including ICICI Securities, BNP Paribas, Equirus Capital, and JM Financial.