Fedbank Financial Services
Book Building issueMainboard₹1,093 Cr issue
-1.61%
Listing gain over issue price
Issue size
₹1,093 Cr
1 lot at cut-off
₹14,980
Lot size
107shares
Open
22 Nov 2023
Close
24 Nov 2023
Allotment
28 Nov 2023
Listing
30 Nov 2023
Listing performance
Issue price
₹140
Listed at
₹137.75
Listing-day close
₹140.25
Latest price
₹149.71
Close on 23 Oct 2026
Listing gain
-1.61%
Return since issue
+6.94%
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 22 Nov 2023 – 24 Nov 2023
- Listing date
- 30 Nov 2023
- Face value
- ₹10 per share
- Issue price
- ₹140 per share
- Lot size
- 107 shares
- Issue type
- Book Building issue
- Total issue size
- ₹1,093 Cr
- Market cap at offer price
- ₹5,165 Cr
- Promoter holding
- 71.44% → 61.65% pre-issue → post-issue
- ISIN
- INE007N01010
- Registrar
- MUFG Intime India Pvt.Ltd.
- Lead managers
- ICICI Securities Ltd.
- Registered office
- Kanakia Wall Street, A Wing 5th Floor, Unit No.511 Andheri Kurla Road, Andheri (East), Maharashtra
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 2,31,91,374 | — | — |
| Market maker | 0 | — | — |
Application size
Minimum 107 shares per lot, in multiples, at ₹140
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 107 | ₹14,980 |
| Retail (max) | 13 | 1,391 | ₹1,94,740 |
| S-HNI (min) | 14 | 1,498 | ₹2,09,720 |
| S-HNI (max) | 66 | 7,062 | ₹9,88,680 |
| B-HNI (min) | 67 | 7,169 | ₹10,03,660 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Shares allocated
2,31,91,374
Anchor portion
₹325 Cr
at ₹140 per share
Valuation and performance
Valuation at offer price
₹140 per share
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 5.60 | — |
| P/E (×) | 25.00 | — |
| Market cap | — | ₹5,165 Cr |
Key performance indicators
Latest reported period
- Return on net worth
- 13.29%
- NAV per share
- ₹42.11
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Fedbank Financial Services
Fedbank Financial Services Limited is a retail-focused non-banking financial company incorporated on April 17, 1995, and registered with the Reserve Bank of India to carry on the business of a non-banking financial institution without accepting public deposits (certificate of registration no. N-16.00187). The company is promoted by The Federal Bank Limited, a major Indian commercial bank. Fedbank operates through 584 branches across multiple states and union territories, primarily in western, northern and southern India. The company provides a well-tailored suite of mortgage loan products including housing loans, small ticket loan against property, and medium ticket loan against property targeting the micro, small and medium enterprises (MSME) and emerging self-employed individuals (ESEI) sectors. Additionally, the company offers unsecured business loans and gold loans. As of June 30, 2023, the company's mortgage loans, gold loans and unsecured business loans had assets under management of ₹47,024.46 million, ₹31,241.72 million and ₹14,872.49 million respectively.
Company Analysis
from RHPFedbank Financial Services Limited is a non-banking financial company promoted by The Federal Bank Limited that provides retail lending products including housing loans, loan against property, unsecured business loans, and gold loans primarily to micro, small and medium enterprises and emerging self-employed individuals.
Fedbank Financial Services Limited is a retail-focused non-banking financial company incorporated on April 17, 1995, and registered with the Reserve Bank of India to carry on the business of a non-banking financial institution without accepting public deposits (certificate of registration no. N-16.00187). The company is promoted by The Federal Bank Limited, a major Indian commercial bank. Fedbank operates through 584 branches across multiple states and union territories, primarily in western, northern and southern India. The company provides a well-tailored suite of mortgage loan products including housing loans, small ticket loan against property, and medium ticket loan against property targeting the micro, small and medium enterprises (MSME) and emerging self-employed individuals (ESEI) sectors. Additionally, the company offers unsecured business loans and gold loans. As of June 30, 2023, the company's mortgage loans, gold loans and unsecured business loans had assets under management of ₹47,024.46 million, ₹31,241.72 million and ₹14,872.49 million respectively.
non-banking financial servicesretail lendinghousing financegold loansunsecured business loansMSME financing
Objects of the Issue
- For augmentation of our Company's Tier – I capital base p.19
- Objects of the Offer p.43
- Augmentation of Tier-I capital base Up to ₹6,000.00 million p.111
- Meeting Offer Expenses p.111
- General corporate purposes p.432
Issue Structure
- Fresh Issue
- Up to [●] Equity Shares aggregating up to ₹6,000.00 million
- Offer for Sale
- Up to 35,161,723 Equity Shares aggregating up to ₹[●] million
- Face Value
- ₹10
Business Model
The company earns revenue through interest income on loans provided to retail customers, fee and commission income, and income from distribution business with its promoter, The Federal Bank Limited. The company raises funds through borrowings from banks and financial institutions, debt securities including non-convertible debentures, and securitization/assignment of loan receivables to banks and other financial institutions.
Business Segments
Includes housing loans, small ticket loan against property and medium ticket loan against property
Loans provided against gold jewelry as collateral
Unsecured loans provided to business customers
Secured loans provided against gold jewelry collateral
Loans against property secured by real estate collateral
Unsecured loans provided to MSME and retail customers
Provides collateralized loans to individuals including housing, vehicle, and personal loans
Provides loans to the emerging MSME sector
Provides gold-backed lending with typical ticket sizes and competitive yields. The company operates in the organized gold loan market competing with other NBFCs and banks.
Loans against gold jewelry as collateral to individual customers including traders, service and manufacturing unit owners and their employees. Loans start from ₹3,000 with average ticket size of ₹0.10 million and tenure up to 12 months. The company also offers doorstep gold loans with in-transit security.
Loans against residential property collateral for self-employed customers and salaried customers with median income of approximately ₹0.50 million per annum. Loans typically range from ₹1.00 million to ₹2.00 million with tenure up to 180 months. Average ticket size ₹1.18 million for small ticket LAP and ₹1.36 million for housing loans.
Loans against commercial and residential property collateral for MSMEs, traders, wholesalers, distributors, retailers, self-employed professionals and small manufacturing companies. Loans typically range from ₹2.50 million to ₹10.00 million with tenure up to 180 months. Average ticket size ₹4.79 million.
Unsecured loans to self-employed professionals and non-professionals, and salaried doctors with turnover of approximately ₹10.00 million per annum and minimum five years of business experience. Average ticket size ₹2.31 million with tenure up to 60 months.
Distribution and sourcing of retail asset products for Federal Bank including housing loans, home equity mortgage loans, personal loans and personal car loans. Operations across Mumbai, Pune, Delhi, Bengaluru, Chennai, Coimbatore, Ahmedabad, Chandigarh, Jaipur, and Hyderabad.
Provides short-term financing against gold collateral with door-step collection options and digital platforms for customer engagement. As of June 30, 2023, the company operated 437 gold loan branches with 125,636 digitally registered customers.
Offers loans against residential and commercial property, with medium ticket LAP at 23.59% and small ticket LAP at 17.45% of gross loan book as of June 30, 2023. Properties include self-occupied residential (66.32%), self-occupied commercial (11.20%), and others.
Provides housing finance at 7.04% of gross loan book as of June 30, 2023, with average tenure of 200 months on origination basis.
Offers unsecured lending to businesses at 13.28% of gross loan book as of June 30, 2023, with product average yield of 18.34% for Fiscal 2023.
Loans against collateral of gold jewellery
Secured loans against property collateral
Medium-ticket loans secured by property assets
Small-ticket loans secured by property assets
Home loans for residential property purchases
Unsecured loans to small and medium enterprises
Sourcing Business of Home Loans, Auto Loans, Personal Loans & SME Loans for Holding Company
Gold Loans, Loan Against Property, MSE Loan against property, Business Loans, Personal Loans & Housing Finance
Construction Finance, Loans to Other NBFCs
Comprises gold loans, loan against property, MSE loan against property, business loans, personal loans and housing finance
Comprises distributing housing loans, personal car loans, personal loans, home equity mortgage loans and retail asset products – end to end sourcing and sales for the Promoter, Federal Bank
Comprises construction finance to developers and loans to other NBFCs; the company has since limited this business and has not made any fresh sanction
SWOT Analysis
Strengths
- • Diversified funding sources with promoter capital access(p.45)
- • Strong credit ratings across instruments(p.46)
- • Significant AUM growth trajectory(p.44)
- • Broad branch network expansion(p.44)
- • Profitable operations with strong PAT growth(p.44)
- • Collateralized retail lending focus with strong underwriting(p.116)
- • Experienced management team tested through business cycles(p.116)
- • Diversified funding profile with lower cost of funds advantage(p.116)
- • Technology-enabled scalable operating model(p.116)
- • Presence in large, underpenetrated markets with growth potential(p.116)
- • India positioned as fastest-growing major economy amid global slowdown(p.133)
- • India ranked 5th globally by nominal GDP with 3.6% world share, 3rd by PPP with 7.5% share(p.134)
- • Demographic dividend with 64% population aged 15-59 years and median age under 30(p.138)
- • Rapid urbanization trend supporting infrastructure investment and consumption(p.138)
- • Retail credit market growing at 14-15% CAGR with significant underpenetration at 21% vs 62% in China(p.148)
- • Gold loan market growing at 10-12% CAGR with organized sector expansion displacing informal lenders(p.167)
- • NBFC credit expected to grow at 12-14% CAGR between FY2023-2025, faster than banking credit(p.156)
- • High household savings rate at 29% of GDP, supporting credit demand and capital availability(p.150)
- • Second and third lowest cost of borrowing in peer set(p.206)
- • Third fastest AUM growth among NBFCs with 33% CAGR(p.206)
- • Fastest growing gold loan NBFC(p.206)
- • High secured portfolio with 86.24% collateralized by tangible assets(p.206)
- • Third highest growth in disbursement with 35% CAGR(p.206)
- • Promoted by Federal Bank, one of five private bank-promoted NBFCs(p.206)
- • Strong credit ratings (AA and AA-) from CARE and India Ratings(p.206)
- • Experienced management team with over 200 years consolidated experience(p.212)
- • Diversified loan portfolio across multiple products and geographies(p.248)
- • Substantial branch network and geographic reach(p.253)
- • Strong net worth and capital position(p.253)
- • Solid credit rating upgrade(p.253)
- • Rapid loan book growth trajectory(p.253)
- • Regulatory compliance framework in place(p.245)
- • Diversified lending portfolio across multiple product segments(p.312)
- • Consistent collections and strong collection efficiency across products(p.297)
- • Strong geographical presence across India with concentration in high-growth metros(p.297)
- • Gold loans comprise material portion of portfolio with strong asset coverage(p.330)
- • Strong capital base and improving profitability trajectory(p.308)
- • Significant capital adequacy ratio providing financial resilience(p.384)
- • Diversified lending portfolio across retail and structured finance segments(p.366)
- • Controlled concentration risk with top 20 borrowers representing minimal exposure(p.386)
Weaknesses
- • Rising NPA and bad debt write-offs indicating asset quality deterioration(p.42)
- • Significant portion of loan portfolio relatively new with emerging delinquency risk(p.41)
- • Multiple RBI compliance failures and penalties imposed(p.41)
- • Untraceable corporate filings and allotments without documentation(p.58)
- • High cost to income ratio and low return on assets vs peer set(p.53)
- • Ransomware attack with customer data breach(p.56)
- • Concentrated customer base risk in emerging MSME sector(p.116)
- • Limited geographic presence to 16 states and UTs(p.118)
- • Elevated Gross NPA at 2.03% compared to peers(p.121)
- • Promoter holding concentration at 72.28% post-IPO (pre-IPO)(p.102)
- • Only 24% of estimated 70 million MSMEs have formal credit access, indicating high default risk in target segments(p.187)
- • Rural credit concentration at only 8% despite representing 47% of GDP, creating uneven geographic risk(p.147)
- • High NBFC GNPA ratio of 4.8% in FY2023, indicating asset quality challenges(p.163)
- • Gold loan NBFCs exposed to volatility in gold prices affecting LGD and collateral value(p.173)
- • NBFC sector borrowing costs elevated at 8.2% in FY2023, limiting margin compression(p.160)
- • High concentration in top three states (53.63% of AUM)(p.208)
- • Dependence on leased premises for all branches and registered office(p.233)
- • Recent rapid branch expansion with 279 branches less than three years old(p.208)
- • 18 branches with leases expiring in Fiscal 2024(p.233)
- • History of defaults on borrowings from financial institutions(p.254)
- • Rising non-performing assets requiring increased provisioning(p.282)
- • High leverage and debt dependency(p.290)
- • Concentration in few customer segments and loan products(p.285)
- • Dependence on key managerial personnel(p.272)
- • Deteriorating asset quality with rising NPA ratios(p.293)
- • High concentration in MSME and ESEI borrowers with elevated Stage 3 ratios(p.294)
- • Elevated finance costs impacting profitability(p.299)
- • Others portfolio with wind-down status shows stressed asset quality(p.293)
- • High leverage ratio with Total Borrowings to Equity increasing(p.299)
- • Rising credit impairment ratio indicating asset quality stress(p.386)
- • Significant increase in gross NPA during the period(p.386)
- • Heavy reliance on borrowings with limited deposit base(p.383)
- • Substantial promoter concentration limiting institutional diversity(p.348)
- • High financial indebtedness with ₹76.14 billion outstanding borrowings(p.432)
- • Borrowings dependent on diverse lender base with strict covenants(p.434)
- • Exposure to multiple litigation matters and regulatory actions(p.437)
- • Active criminal proceedings against the company with material liability exposure(p.436)
- • Large exposure to individual borrower defaults through dishonor proceedings(p.438)
- • Promoter subject to material fraud exposure impacting parent company stability(p.439)
Opportunities
- • Significant growth in gold loan market(p.55)
- • Expanding MSME loan market with strong growth trajectory(p.55)
- • Continued economic growth in India supporting retail lending demand(p.70)
- • Strategic shift reducing institutional borrower concentration(p.44)
- • Technology and digitization as competitive advantage(p.44)
- • Expansion in emerging MSME sector targeting underserved customers(p.116)
- • Growth potential in large underpenetrated markets(p.116)
- • AUM growth momentum of 46.59% in FY2023(p.118)
- • Augmentation of Tier-I capital base for future business growth(p.111)
- • Enhancement of brand name and public market listing benefits(p.111)
- • Massive credit gap of ₹92 trillion in MSME segment creating large addressable market(p.187)
- • Rising financial literacy enabling expansion into underserved semi-urban and rural segments(p.140)
- • Digital payments growth from 39% to 99% of transactions creating data for credit assessment(p.142)
- • Co-lending framework enabling NBFCs to leverage bank capital and reach for PSL compliance(p.164)
- • Online and doorstep gold loan models expanding addressable market beyond traditional branch network(p.169)
- • ₹22 trillion addressable market for secured residential property-backed MSME lending(p.180)
- • Government initiatives including ECLGS, PLI scheme, and account aggregators supporting credit growth(p.190)
- • MSME loan segment growing at 18% CAGR with huge demand-supply gap(p.215)
- • Housing finance market to log 13-15% CAGR between FY2023 and FY2026(p.193)
- • Mortgage market to grow at 11-13% CAGR driven by urbanization and tier-2/3 cities(p.194)
- • NBFC credit growth expected at 13-14% in FY2024(p.208)
- • Underserved ESEI and MSME segment with limited formal banking access(p.206)
- • Top 15 states account for 92% of MSME portfolio with limited penetration(p.215)
- • Gold loan countercyclical growth provides hedge during economic downturns(p.217)
- • Expansion into digital lending channels(p.253)
- • Growth in affordable housing and mortgage segments(p.253)
- • Expansion of gold loan and door-step delivery model(p.253)
- • Securitization and asset transfer capabilities(p.250)
- • Access to priority sector lending classification for NBFCs(p.247)
- • Expansion in retail lending segments with growing disbursements(p.296)
- • Housing loan segment growth with strong collection efficiency(p.296)
- • Unsecured Business Loan growth targeting MSME segment(p.296)
- • Medium Ticket LAP with improving tenure and collections(p.293)
- • Substantial growth in loan portfolio from INR 45.5bn to INR 83.0bn(p.370)
- • Expansion into real estate lending with growing residential mortgage exposure(p.385)
- • Distribution segment growth supporting fee income diversification(p.359)
Threats
- • RBI regulatory arbitrage elimination reducing competitive advantage(p.42)
- • Intense competition from banks and new fintech entrants(p.53)
- • Banks gaining market share in gold loans at higher LTV(p.53)
- • COVID-19 pandemic impact on customer repayment capacity(p.42)
- • Potential promoter regulatory constraints on lending activity(p.43)
- • Increased interest rate environment reducing credit demand(p.47)
- • Inflation and increased operating costs(p.70)
- • Investor taxation on capital gains at 10% long-term and 15% short-term rates(p.75)
- • Exchange rate fluctuation risk impacting dividend repatriation(p.76)
- • U.S. shareholder PFIC classification and adverse tax consequences(p.76)
- • Delisting/trading restrictions via Additional Surveillance Measures (ASM) and Graded Surveillance Measures (GSM)(p.77)
- • Post-offer ownership dilution via future issuances and convertible securities(p.76)
- • Global economic slowdown with advanced economies at decadal-high interest rates reducing India's exports(p.136)
- • RBI monetary tightening with repo rate at 6.5% increasing borrowing costs across NBFCs(p.160)
- • El Niño risk disrupting monsoons and impacting rural incomes and agricultural lending(p.136)
- • Inflation expected to average 5.5% in FY2024 with food inflation as key monitorable(p.135)
- • RBI's increased daily NPA recognition norms causing GNPAs to spike as loans slip into 90+ DPD category(p.163)
- • Increased competition from banks and finTechs gaining market share in gold loans and MSME segments(p.170)
- • Regulatory tightening with scale-based approach for NBFCs increasing capital and provisioning requirements(p.154)
- • Gold loan sector cyclicality dependent on economic conditions(p.217)
- • Competition from established banks and diversified NBFCs(p.232)
- • Asset quality deterioration risk with GNPA of 2.26% as of June 30, 2023(p.209)
- • Exposure to gold price fluctuation risk(p.229)
- • Interest rate risk from RBI rate hikes affecting profitability(p.193)
- • Stringent RBI regulatory framework for NBFC operations(p.246)
- • Compressed net interest margins from rate competition(p.284)
- • Rising cost of borrowings impacting profitability(p.291)
- • Macroeconomic sensitivity and asset quality deterioration risk(p.286)
- • Dependence on bank funding and wholesale financing markets(p.290)
- • Regulatory restrictions on customer acquisition and recovery practices(p.244)
- • Significant credit risk from rising Stage 3 loans and restructured exposures(p.293)
- • Economic cyclicality and external macro factors affecting borrower repayment capacity(p.313)
- • Non-MSME segment showing elevated credit stress indicators(p.294)
- • Interest rate environment and borrowing cost pressures(p.299)
- • Material interest rate risk exposure from floating rate liabilities(p.375)
- • Foreign currency volatility from USD denominated borrowings(p.344)
- • Gold price fluctuation risk materially affecting loan portfolio value(p.375)
- • Liquidity risk from asset-liability maturity mismatches(p.383)
- • Regulatory requirement to maintain minimum capital ratios and net-worth constraints(p.434)
- • Interest rate risk from mixed fixed and floating-rate debt portfolio(p.433)
- • Refinancing and rollover risk from substantial short and medium-term debt maturities(p.433)
- • Concentration risk in major lenders with potential for covenant breach cascades(p.434)
- • Promoter subject to significant tax disputes creating contingent liability exposure(p.440)
- • Enforcement action risk from event-of-default triggers and security enforcement(p.434)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| The Federal Bank Limited | Promoter | 72.28% | — |
| Federal Bank | Promoter | more than 51% | more than 51% |
| The Federal Bank Limited | Promoter Selling Shareholder | 72.28% | — |
| The Federal Bank Limited | Promoter | More than 51% (pre-issue) | More than 51% (to continue post-issue) |
| The Federal Bank Limited | Promoter/Holding Company | — | — |
| The Federal Bank Limited | Parent Company/Promoter | — | — |
| Federal Bank Limited | Promoter/Holding Company | 74.00% | 73.22% |
| True North Fund VI LLP | Promoter Group/Significant Influence | 26.00% | 25.72% |
| The Federal Bank Limited | Promoter | — | — |
| The Federal Bank Limited | Promoter/Promoter Selling Shareholder | — | — |
| True North Fund VI LLP | Investor Selling Shareholder | — | — |
| The Federal Bank Limited | Promoter Selling Shareholder | — | — |
| True North Fund VI LLP | Investor Selling Shareholder | — | — |
Leadership
Anil Kothuri · Managing Director and Chief Executive Officer
C. V. Ganesh · Chief Financial Officer
Rajaraman Sundaresan · Company Secretary and Compliance Officer
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.
Fedbank Financial Services IPO FAQs
What is the lot size of Fedbank Financial Services IPO?
The minimum lot size of Fedbank Financial Services IPO is 107 shares. One lot costs ₹14,980 at the cut-off price.
When does Fedbank Financial Services IPO open and close?
Fedbank Financial Services IPO opened for subscription on 22 Nov 2023 and closed on 24 Nov 2023.
What is the listing date of Fedbank Financial Services IPO?
Fedbank Financial Services IPO listed on 30 Nov 2023.