Fedbank Financial Services IPO Receives Lukewarm Response on First Day
The public offering of Fedbank Financial Services saw a subscription of only 38% on the first day, with no interest from qualified institutional buyers. The non-banking finance company (NBFC) plans to use the net proceeds to boost its Tier – I capital base.
The offering, with a price band of ₹133-140 per share, closes on November 24. The ₹1,092 crore issue received no interest from qualified institutional buyers on the first day, but 21% of the non-institutional investor portion was subscribed, while 67% of the retail investor portion received subscriptions.
Before the issue opened to the public, the NBFC raised ₹324.67 crore from 22 anchor investors, including HDFC Mutual Fund, HDFC Life Insurance, SBI Life Insurance, Nippon Life India, and others.
The issue encountered a lukewarm response, with no subscription from qualified institutional buyers, minimal interest from non-institutional investors, and moderate interest from retail investors. The IPO will close on November 24, and its price band was fixed at ₹133-140 per equity share.
The fresh issue comprises an aggregate of up to ₹600 crore, with the NBFC planning to utilize the net proceeds to bolster its Tier – I capital base to meet future capital requirements due to business and asset growth. The retail-focused NBFC is promoted The Federal Bank, with 584 branches and a focus on MSME loans, gold loans, and more. As of March 31, 2023, it has the third fastest assets under management (AUM) growth among NBFCs in India. Its AUMs grew at a 33% compounded annual growth rate between FY20 and FY23, reaching ₹94,34 crore the end of June 2023.
The company’s total revenues grew 37% and 26% in FY23 and FY22, respectively, with profits also increasing 74% and 67% during the same periods. As of June 30, 2023, its Gross non-performing assets (NPA) and Net NPA were at ₹189 crore and ₹147 crore, respectively.
Source: BSE