Fedbank Financial Services Ltd

About the Company:

Fedbank Financial Services Ltd is a retail focused non-banking finance company (“NBFC”) promoted by The Federal Bank Ltd.

Company is one among five private bank promoted NBFCs in India.

Company is headquartered in Mumbai, Maharashtra and is present in 17 states and union territories across India with a strong presence in Southern and Western regions of India.

As of June 30, 2023, company covered 190 districts in 17 states and union territories in India through 584 branches.

Company’s branches are located in states, such as Andhra Pradesh (including Telangana) and Rajasthan.

Company is among the fastest growing gold loan NBFC in India among the peer set as of March 31, 2023, and had the fastest year-on-year growth among gold loan NBFCs in India as of June 30, 2023.

As on June 30, 2023, 86.24% of company’s total Loan Assets are secured against tangible assets, namely gold or customer’s property.

Company has a well-tailored suite of products targeted to match customers’ needs, which includes mortgage loans such as housing loans; small ticket loan against property (“LAP”); and medium ticket LAP, unsecured business loans, and gold loans.

Company’s Branch Network:

Management Team:

Mr. Balakrishnan Krishnamurthy (Designation: Chairman and Independent Director)
Mr. Anil Kothuri (Designation: Managing Director and Chief Executive Officer)

Objectives of the Issue:

Offer for Sale: (Rs.492 cr)

Each of the Selling Shareholders will be entitled to their respective portion of the proceeds from the Offer for Sale. Company will not receive any proceeds from the Offer for Sale.

Fresh Issue: (Rs.600 cr)

The Net Proceeds are proposed to be utilised towards augmentation of Company’s Tier – I capital base to meet our Company’s future capital requirements which are expected to arise out of the growth in Company’s business and assets.

Positives for the Company:

Company is present in large, underpenetrated markets with strong growth potential.

As of June 30, 2023 Company is present in 17 states and union territories across India with a strong presence in Southern and Western regions of India and has covered 190 districts in 17 states and union territories in India through 584 branches.
Company’s branches are located in states, such as Andhra Pradesh (including Telangana) and Rajasthan, which have better asset quality than other states.
Company’s presence across these contiguous states allows us to diversify our exposure across local micro markets.

Company is focused on retail loan products with a collateralized lending model targeting individuals and the emerging MSME sector.

Company is largely focused on a collateralized lending model for our retail finance segment, targeting ESEI consumers and the emerging MSME sector.
As on June 30, 2023, 86.24% of our total Loan Assets are secured against tangible assets, namely our customer’s gold or property.
Company’s average ticket size was Rs. 1.3 Lakhs in the three-months period ended June 30, 2023.

Company has Strong underwriting capability and presence in select customer segment combined with robust risk management capabilities focused on effective underwriting and collections.

Company has an effective underwriting capability, built on our experienced underwriting team and established processes, which assess the quality of potential customers’ business and collaterals, and then reasonably estimate the possibility of defaults, prior to disbursal of loans.

Company has Well diversified funding profile with an advantage of lower cost of funds.

Company’s ability to access diversified sources of funding is a key contributor to our growth.
Company intends to continue to diversify our funding sources, identify new sources and pools of capital and implement robust asset liability management policies with the aim of further optimizing our borrowing costs and help expand our net interest margin.
Company’s average cost of borrowing was 7.77%, 7.44% and 8.30% for Fiscals 2023, 2022 and 2021, respectively.

Financials of the Company:

(in Crores)	FY 21	FY 22	FY 23	30th June 23
Revenue	697.5	883.6	1214.6	367.8
Net Profit	61.6	103.4	180.1	53.8

Valuation of Peer Group Companies:

Company Name	Face Value	EPS	PE Ratio	RoNW	NAV
Fedbank Financial Services Ltd	10	5.59	25.04	13.29%	42.11
Five Star Business Finance Ltd	1	20.70	37.54	13.91%	148.94
Aptus Value Housing Ltd	2	10.10	28.58	15.06%	67.05

IPO Details:

Details	Info
Issue Opens on	22nd November 2023
Issue Closes on	24th November 2023
Issue Price	Rs.133- 140
Face Value	Rs.10
Retail Category Allocation	35%
Minimum Lot	107 Shares
Minimum Investment	Rs. 14,980
Issue Constitutes	21.14 %
Issue Size	Rs.1092 cr ($ 131 million)
Market Cap	Rs.5165 cr ($ 622 million)
Listing at	NSE & BSE
Equity Shares Offered (Fresh)	4,28,57,142
Equity Shares Offered (OFS)	3,51,61,723
Total Equity Shares Offered (Fresh + OFS)	7,80,18,865
Equity Shares Prior to the Issue	32,60,75,940
Equity Shares after the Issue	36,89,33,082

Also Read : List of Upcoming IPO’s in India.

IPO Valuation Parameters:

Earnings Per Share (EPS)	Price To Earnings ratio (PE)	Return on Net Worth (RoNW)	Net Asset Value (NAV)
5.59	25.04	13.29	42.11

Company Contact Info:
Fedbank Financial Services Ltd Kanakia Wall Street, A Wing 5th Floor, Unit No. 511 Andheri Kurla Road, Andheri (East) Mumbai 400 093 Maharashtra, India. Telephone: +91 22 6852 0601 Email: cs@fedfina.com Website: www.fedfina.com

IPO Registrar Info:
Link Intime India Private Limited C-101, 1st Floor, 247 Park L.B.S. Marg, Vikhroli West Mumbai 400 083 Maharashtra, India Tel: +91 22 4918 6000 E-mail: fedbankfinancialservices.ipo@linkintime.co.in Website: www.linkintime.co.in