FedFina IPO Fully Subscribed On Last Day, What Latest GMP Hints For Listing? Details Here

The Initial Public Offering (IPO) of Fedbank Financial Services (Fedfina), a subsidiary of Federal Bank, witnessed full subscription on the third and final day of the share sale. As the issue closed on November 24, shares of Fedfina are now trading at a premium of Rs 2 in the grey market, indicating a 1.4% uptick over the issue price range of Rs 133-140 per equity share.

Data from the National Stock Exchange (NSE) reveals that the issue received bids for 5.68 crore equity shares against the 5.59 crore shares on offer. Notably, the retail category showed the highest subscription at 1.42 times, underlining strong interest from individual investors. Non-institutional investors followed at 0.66 times, while qualified institutional buyers showed a healthy interest at 0.56 times. The portion reserved for employees was subscribed 0.91 times.

Fedfina aims to raise Rs 1,092 crore through the IPO, with retail investors able to bid for a minimum of 107 equity shares and in multiples thereof, requiring a minimum bid amount of Rs 14,980.

The IPO comprises a fresh equity issue of Rs 600 crore by the company and an offer for sale (OFS) of 3.5 crore equity shares. Federal Bank and True North Fund VI LLP, the private equity fund, are offloading 1.64 crore and 5.38 crore equity shares, respectively.

Fedbank Financial plans to utilize the net proceeds from the IPO to strengthen its Tier-I capital base, meeting future capital requirements stemming from business and asset growth. A portion of the funds will also cover offer expenses.

The company's fiscal year 2023 results showcase a robust financial performance. Net interest income rose by 34% to Rs 638.02 crore, with the net interest margin (NIM) slightly increasing to 8.99%. The profit after tax surged by an impressive 74% to Rs 180.13 crore. Notably, assets under management (AUM) witnessed a significant jump of 46.59%, and return on equity (RoE) stood at 14.36% in FY23.

Fedbank Financial is one of India's five private bank-promoted NBFCs, emphasizing its commitment to catering to the MSMEs and the emerging self-employed sector. With a presence in 17 states and union territories, the company operates through 584 branches, covering 190 districts.

ICICI Securities, BNP Paribas, Equirus Capital, and JM Financial played pivotal roles as book-running lead managers in the IPO. Link Intime India Private Ltd took on the responsibility of being the registrar. The equity shares of Fedfina are scheduled to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on December 5.