Federal Bank has given a nod to the initial public offer (IPO) of its subsidiary FedBank Financial Services or FedFina, which is eyeing a massive valuation of Rs 6,000-7,000 crore, CNBC-TV18 has learnt. 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.

FedFina is a retail-focused non-banking finance company (NBFC) arm of Federal Bank. It has over 435 branches across the country and sells gold loans, loans against property, business loans, and home loans. Private equity fund True North had bought a 26 percent stake in the NBFC for Rs 400 crore in 2018.

Its assets under management are worth over Rs 4,800 crore as of March 2021, with retail loans making over 95 percent of the loan book. Its gross and net non-performing assets stood at 1.04 and 0.7 percent, respectively as of March 2021.

Watch the accompanying video of CNBC-TV18’s Abhishek Kothari for more details.

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