Fedbank Financial Services, a subsidiary of Federal Bank, has filed with capital markets regulator Sebi to raise funds through an initial public offering (IPO). 

The public float consists of a fresh issue aggregating up to Rs 900 crore and an offer for sale (OFS) of up to 45,714,286 equity shares by promoter and investor, according to the draft red herring prospectus (DRHP).

The OFS comprises up to 16,497,973 equity shares by Federal Bank and up to 29,216,313 equity shares by True North Fund VI LLP.

Federal Bank will continue to own more than 51% of the outstanding share capital post the completion of this offering.

The company proposes to utilise the net proceeds from the fresh issue towards augmenting its Tier – I capital base to meet its future capital requirements arising out of the growth of business and assets.

FedFina is a retail-focused NBFC and operates a ‘twin engine’ business model, with two complementary products — gold loans and instalment loans to MSMEs and emerging self-employed individuals.

Eight years after obtaining NBFC licence in 2010, FedFina got private equity fund True North to take 26% stake for around Rs 400 crore. The bank holds 74% shares in the NBFC.

FedFina’s assets under management stood at Rs 4,863 crore as of March-end, with retail loans comprising 96% of the loan book. The NBFC caters to products like gold loan, home loan, loan against property (LAP) and business loan.