Federal Bank weighs NBFC arm stake sale to raise up to Rs 2,000 cr: Report

Kerala-based Federal Bank Ltd is weighing a stake sale in its non-banking financial company Fedbank Financial Services Ltd (Fedfina) to raise as much as Rs 2,000 crore, said a report on Wednesday. 

Fedfina is working with advisers on the potential stake sale, reported Bloomberg quoting people familiar with the matter.

The offering could consist of new shares and existing ones from Federal Bank and private equity firm True North, which owns about one-fourth of the company, the report added. Mumbai-based Fedfina is seeking a valuation of about Rs 5,000 crore in the stake sale and could launch its planned IPO sometime in 2024, the report said. 

As on December 31, Federal Bank held 73.2% stake in Fedfina. 

Fedbank Financial Services acquired receipt of its NBFC licence in 2010. The non-bank lender has more than 463 branches across India. It offers products like gold loans, home loans, loan against property, and business loans.

At 1515 hours on Wednesday, Federal Bank's scrip on BSE was trading 2.55% lower at Rs 126.35.