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True North-backed nonbank lender Fedfina plans IPO
Photo Credit: 123RF.com

Fedbank Financial Services Ltd (Fedfina), a retail-focused non-bank lender set up by Federal Bank Ltd, is planning a public listing, two people aware of the matter said.

The Kerala-based company is expected to shortly file draft papers for the initial public offering (IPO), which would make it one of India’s few bank-owned non-banking financial companies (NBFCs) that are publicly traded.

Fedfina, which received its non-banking financial company licence in 2010, has more than 435 branches across the country, offering gold loans, home loans, loans against property (LAP) and business loans.

In 2018, homegrown private equity fund True North bought a 26% stake in Fedfina for around ₹400 crore through its sixth fund which closed at $600 million by end-2018.

“Fedfina is working with ICICI Securities, JM Financial and Equirus Capital on the initial public offering. They are likely to file the draft prospectus as early as the end of this month or by next month," one of the two people cited above said, both of whom spoke on condition of anonymity.

“The initial public offering will be a mix of primary and secondary share sales. Both Federal Bank and True North are likely to sell a small part of their stakes but, largely, it will comprise a fresh issue of shares to raise growth capital for the business. The initial public offer size could be as much as $100-150 million. Fedfina is a retail-focused non-banking financial company and has seen strong growth in segments such as gold loans," the person added.

Federal Bank and True North did not respond to emails.

Fedfina’s assets under management stood at ₹4,863 crore as of March-end, as per the company’s website, with retail loans comprising 96% of the loan book.

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