The board of Fedbank Financial Services Ltd., also known as FedFina, a subsidiary of private lender Federal Bank Ltd. has proposed an Initial Public Offering at its board meeting on Monday, July 17.

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FedFina's IPO will be undertaken through a combination of a fresh issue and an Offer for Sale, subject to market conditions, receipt of applicable approvals, including that of market regulator SEBI and other considerations.

Size of FedFina's IPO, portion of the Offer for Sale, price, and other details will be intimated in due course after finalisation of the same in consultation with the book running lead managers, the exchange filing said.

Federal Bank further said that even after the proposed IPO, FedFina will continue to remain a subsidiary of the lender.

"FedFina is actively in the process, they had a shareholder approval and with last year being a bit softer they chose to hold back. I think they are reconsidering and filing for a capital raise," Shyam Srinivasan, Federal Bank's MD & CEO had told CNBC-TV18 during a post-earnings interaction last week.

FedFina had filed its IPO papers with SEBI in February 2022, seeking to raise Rs 900 crore.

"The company has done well last year and this quarter. So I do believe that in the course of not very far from now, they will be back in the market," Srinivasan had mentioned.

For the June quarter, Federal Bank's Net Interest Income rose 19.6 percent year-on-year, while net profit was up 42 percent from the same period last year. Gross NPA saw marginal deterioration on a sequential basis, but net NPAs remained steady at 0.69 percent.

Shares of Federal Bank had ended 2.5 percent higher on Monday and are currently down 3.8 percent on a year-to-date basis.

First Published:Jul 18, 2023 6:06 AM IST