Fedbank Financial Services IPO sails through, subscribed 2.2x

• The issue’s QIB portion was subscribed 3.5 times the shares on offer.
• The NBFC plans to utilize net proceeds to augment its Tier – I capital base.

Fedbank Financial Services’ maiden issue was subscribed 2.2 times the shares on offer, on Friday evening.

The ₹1,092 crore issue saw its qualified institutional buyer (QIB) portion subscribed 3.5 times. The non-institutional and retail investor portion was subscribed 1.4 times and 1.8 times respectively.

The NBFC had raised ₹324.67 crore from 22 anchor investors before the issue opened to the public. Investors like HDFC Mutual Fund, HDFC Life Insurance, SBI Life Insurance, Nippon Life India, Societe Generale, Goldman Sachs (Singapore) PTE and more bought into the issue.

Type of investor	No of times subscribed
Qualified Institutional Buyers	3.51
Non-institutional Investors	1.45
Retail	1.82
Total	2.20

Source: BSE

The IPO's price band was fixed at ₹133-140 per equity share. The issue comprises a fresh issue aggregating up to ₹600 crore and an offer for sale by promoter Federal Bank, and selling shareholder of True North Fund VI LLP I.

The NBFC plans to utilize the net proceeds from the fresh issue towards augmenting its Tier – I capital base to meet future capital requirements, arising out of the growth of its business and assets.

It’s a retail focused non-banking finance company (NBFC) promoted by The Federal Bank. It has 584 branches, and is focussed on MSME loans, gold loan and more. It is one of the five private bank promoted NBFCs in the country.

As on March 31, 2023, it has the third fastest assets under management (AUM) growth among NBFCs in the peer set in India. Its AUMs grew at 33% CAGR (compounded annual growth rate) between FY20 and FY23. Its AUMs stand at 94,34 crore as of end of June 2023.

Its total revenues grew by 37% and 26% in FY23 and FY22, respectively. Its profit also grew by 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.