Fedfina Files Draft Prospectus With Sebi For IPO; Promoter Federal Bank To Sell Stake

Federal Bank-backed Fedbank Financial Services aka Fedfina has filed for a draft prospectus with the market regulator for its initial public offering (IPO). Fedfina's IPO is a combination of a fresh issue and an offer for sale (OFS). The listed promoter Federal Bank is looking to offload a stake in Fedfina through the IPO. Details like price bands, issue size, and IPO dates will be revealed in due course.

As per the DRHP, the IPO is comprised of fresh issues worth Rs 750 crore and OFS up to 70,323,408 equity shares.

Under the OFS, Federal Bank will sell 16,497,973 equity shares in Fedfina, while True North Fund VI LLP to sell up to 53,825,435 equity shares.

The face value of equity shares proposed under the IPO is Rs 10 each.

Of the total size, 50% of the IPO is reserved for qualified institutional buyers (QIBs), while 15% of the portion will be kept for non-institutional investors (NIIs) and the rest of 35% will be allocated to retail individual investors (RIIs).

Companies like ICICI Securities, BNP Paribas, Equirus Capital, and JM Financial are acting as the book-running lead managers. Link Intime India is the registrar of the IPO.

The company plans to utilise proceeds for the augmentation of its tier-1 capital base.

Fedfina is retail-focused non-banking finance company promoted by Federal Bank. The company has a second lowest cost of borrowing among the micro, small and medium enterprises ("MSMEs"), gold loan and MSME & gold loan peer set in India in Fiscal 2023.