Fedbank Financial Services is launching its IPO. The opens for subscription on 22nd November and will close on 24th November 2023.
What does Fedbank Financial Services Limited do?
Incorporated in 1995 and headquartered in Mumbai, Fedbank Financial Services Limited is a retail-focused NBFC promoted by Federal Bank.
As per the CRISIL report, They are one among five private bank-promoted NBFCs in India and have the second lowest cost of borrowing among MSMEs, and gold loans in Fiscal 2023. As of March 31, 2023, They had the third fastest AUM growth among NBFCs in the peer set in India with a three-year CAGR of 33% between Fiscals 2020 and 2023. They are also the fastest growing gold loan NBFC in India among the peer set as of March 31, 2023, with 85.98% of their total Loan Assets being secured against tangible assets, namely gold or customer’s property as of March 31, 2023.
Fedbank Financial Services Limited provides Gold Loans, Home Loans, Loan Against Property (LAP) and Business Loan Services.
As of March 31, 2023, Fedbank Financial Services has a business presence in 191 districts in 16 states through 575 branches with a strong presence in Southern and Western regions of India including Andhra Pradesh (including Telangana) and Rajasthan.
What is the issue size of Fedbank Financial Services IPO?
The 1100 crore public offer of the company is a combination of a Fresh equity issue worth 750 crore and an offer for sale (OFS) worth Rs. 350 crore from the existing shareholders.
Financials of Fedbank Financial Services (₹ crores)
| Financial Year | Total Assets | Total Revenue | Profit After Tax | EPS |
|---|---|---|---|---|
| March 31, 2021 | 5,466.31 | 697.57 | 61.68 | 2.19 |
| March 31, 2022 | 6,555.71 | 883.64 | 103.46 | 3.32 |
| March 31, 2023 | 9,070.99 | 1,214.68 | 180.13 | 5.60 |
Bifurcation of AUM (%)
| Particulars | As on 31/3/2023 | As on 31/3/2022 | As on 31/3/2021 |
|---|---|---|---|
| Mortgage Loans | 49.69 | 47.40 | 44.23 |
| Gold Loans | 32.92 | 36.33 | 39.44 |
| Unsecured Business Loans | 16.03 | 14.56 | 10.24 |
| Others (includes wholesale portfolio exposure and partnership business) | 1.36 | 1.72 | 6.09 |
| Total | 100 | 100 | 100 |
Risk factors to consider:
Lack of timely access to cost-effective funding: The company’s business and operations are dependent on its ability to access cost-effective sources of funding. Any disruption in sources of funding like the NBFC Crisis due to IL&FS default or Covid could have an adverse effect on the business, results of operations, and financial condition.
Competition and dependence on Gold loan portfolio: Nearly 33% of the company’s AUM is derived from gold loan products and the loss of business in relation to such gold loan products could adversely affect the business and prospects
Schedule/Timeline of Fedbank Financial Services IPO
| Issue Period | 22nd November to 24th November 2023 |
|---|---|
| Price band | ₹ 133 to 140 |
| Minimum Bid quantity | 107 & multiples thereof |
| Deadline for accepting UPI mandate | Until 5 PM on the issue closing day |
| Finalization of Allotment | November 30, 2023 |
| Initiation of Refunds | December 1, 2023 |
| Credit of Shares | December 4, 2023 |
| Date of Listing | December 5, 2023 |
| Mandate end date | December 9, 2023 |
| Anchor Investors Lock-In End Date | December 24, 2023 |
How to apply to the Fedbank Financial Services Limited IPO?
You can apply for the Fedbank Financial Services Limited IPO using any supported UPI app by following two steps:
- Enter your bid on Kite
- Accept the UPI mandate on your phone
On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.
How to check the allotment status for Fedbank Financial Services Limited IPO?
You can check the allotment status for the Fedbank Financial Services Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.