Private sector lender Federal Bank has decided to divest stake in wholly-owned subsidiary Fedbank Financial Services (Fedfina).
The board of Fedfina, a non-deposit taking and systemically important non-banking finance company, has on Monday given its nod for the plans to float an initial public offering (IPO) by way of fresh issue of equity shares and offer for sale.
This is, to be sure, subject to approvals from the Securities and Exchange Board of India.
The size of the IPO, portion of offer for sale, price and other details with respect will be determined in due course, the bank said Monday in a regulatory filing to stock exchanges.
“Post undertaking the proposed IPO, FedFina would continue to be a subsidiary of our bank,” the note to stock exchanges said.
Fedfina, which offers multiple loan products such as loan against property (LAP), structured finance and loan against pledge of gold ornaments, has a total loan portfolio Rs 4,492 core at the end of FY22.
It also distributes loan products of the Federal Bank through around 360
branches. It made a net profit of Rs 59 crore for FY21 while its net worth was at Rs 832 crore at the end of March 2021.
Fedfina was incorporated in April 1995 while it received Reserve Bank of India’s approval in August 2010.
