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Federal Bank weighs NBFC arm stake sale to raise up to Rs 2,000 crores

Federal Bank

Federal Bank weighs NBFC arm stake sale to raise Rs 2,000 cr

According to a report on Wednesday, Kerala-based Federal Bank Ltd is considering selling a stake in its non-banking financial company Fedbank Financial Services Ltd (Fedfina) to raise up to Rs 2,000 crore.

Fedfina is consulting with advisers on the potential stake sale, according to Bloomberg, citing people familiar with the situation.

According to the report, the offering could include new and existing shares from Federal Bank and private equity firm True North, which owns about one-fourth of the company. Fedfina, based in Mumbai, is seeking a valuation of around Rs 5,000 crore in the stake sale and may launch its planned IPO in 2024, according to the report.

Federal Bank

As of December 31, Federal Bank owned 73.2% of Fedfina.

Fedbank Financial Services received its NBFC licence in 2010. The non-bank lender has over 463 branches in India. It provides gold loans, home loans, loan against property loans, and business loans.

Federal Bank’s stock was trading 2.55% lower on the BSE at Rs 126.35 at 1515 hours on Wednesday.