Fedbank Financial Services IPO Opens on November 22, Price Band Set at ₹133-140 Apiece

Mumbai- Fedbank Financial Services, a subsidiary of Federal Bank, is all set to launch its Initial Public Offering (IPO) with a price band of ₹133 to ₹140 per share. The IPO subscription period is scheduled to open on November 22 and close on November 24, offering investors an opportunity to become part of this financial institution’s growth story.

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The floor price for the IPO is fixed at 13.30 times the face value of ₹10 per equity share, while the cap price stands at 14 times the face value. The price-to-earnings ratio based on diluted EPS for the financial year 2023, at the cap price, is 25.04, compared to the average industry peer group ratio of 25.57. The lot size for Fedbank Financial Services IPO is 107 equity shares, with additional shares available in multiples of 107.

The IPO allocation to anchor investors is scheduled for November 21, one day prior to the public subscription opening. The basis of allotment of shares is expected to be finalized on November 30, and refunds will be initiated on December 1. Shares are set to be credited to the demat accounts of allottees on December 4. If the company decides to adopt the T+3 settlement norm, these dates may be adjusted accordingly.

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Fedbank Financial Services IPO has allocated up to 50% of the shares in the public issue for Qualified Institutional Buyers (QIB), while Non-Institutional Investors (NII) have a minimum allocation of 15%. Retail Investors can expect a minimum allotment of 35% of the offering. Additionally, eligible employees participating in the employee reservation portion will receive a ₹10 discount per equity share.

Fedbank IPO

The IPO comprises a fresh issue of equity shares worth up to ₹750 crore and an offer-for-sale (OFS) of up to 70,323,408 equity shares by the promoters and selling shareholders. The face value of each share is ₹10, as detailed in the Draft Red Herring Prospectus (DRHP). The Federal Bank, a promoter shareholder, may sell up to 16,497,973 equity shares, while True North Fund VI LLP, another shareholder, may sell up to 53,825,435 equity shares as part of the OFS.

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Fedbank Financial Services is one of the five NBFCs in India supported by private banks. The Book Running Lead Managers (BRLM) for the IPO are ICICI Securities Ltd, BNP Paribas, Equirus Capital Private Ltd, and JM Financial Ltd. Link Intime India Private Ltd will serve as the registrar to the offer.

FedFina had initially filed a DRHP for an IPO last year but withdrew it due to unfavorable market conditions. Now, with renewed confidence and regulatory approvals in place, the company is revisiting its capital-raising options to fuel its growth.

The company’s listed industry peers include Aptus Value Housing (with a P/E of 27.04), IIFL Finance (with a P/E of 14.52), Five Star Business Finance (with a P/E of 31.73), Manappuram Finance Limited (with a P/E of 7.28), and Muthoot Finance Limited (with a P/E of 14.29).

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Shares from the Fedbank Financial Services IPO are expected to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on December 5, 2023, subject to market conditions and regulatory approvals. Investors are eagerly awaiting this opportunity to become part of the company’s exciting journey in the financial services sector.

For more information and updates on the Fedbank Financial Services IPO, interested parties can refer to the official prospectus and the websites of the relevant authorities and lead managers.

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