Federal Bank may sell seven percent of its 76 percent stake in FedFina in the proposed initial public offering (IPO), sources said. True North will sell 40-50 percent of its 24 percent stake in FedFina in the initial share sale, they said.

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CNBC-TV18 awaited a response from Federal Bank on its query on the matter.

Earlier in January, Federal Bank gave a nod to the initial public offering (IPO) of its subsidiary FedBank Financial Services or FedFina, which is eyeing a massive valuation of Rs 6,000-7,000 crore.

Also Read: Fedbank Financial Services' board approves resolution for IPO

"We wish to inform you that the Board of Directors of Fedbank Financial Services Limited, a subsidiary of our Bank at its meeting held today, i.e. January 11, 2022, has approved initiating the process of an initial public offering (“IPO”) by way of fresh issue and offer for sale, subject to market conditions," Federal Bank said in a regulatory filing.

The IPO size is expected to be around Rs 2,000 crore, of which fresh issue could be around Rs 1,000 crore and the rest Rs 1,000 crore would be offered for sale by its promoters.

The company's DRHP is expected to be filed by February 12, 2022, to the markets regulator, as per the Securities and Exchange Board of India (SEBI) rule.

At 11:25 am, shares of Federal Bank were trading at Rs 101.15, down 0.25 points, or 0.25 percent lower at BSE.

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