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16 Nov 2024
Fedbank Financial Services IPO: A Comprehensive Insight
Introduction:
Fedbank Financial Services Limited recently concluded its Initial Public Offering (IPO), raising an impressive Rs 1,092.26 crores through a book-built issue. The IPO consisted of a fresh issue of 4.29 crore shares, amounting to Rs 600.77 crores, and an offer for sale of 3.52 crore shares, aggregating to Rs 492.26 crores.
Key Milestones:
| Bidding Period | November 22 to November 24, 2023 |
|---|---|
| Allotment Date | November 28, 2023 |
| Listing Date | November 30, 2023 |
Issue Details:
| Price Band | ₹133 to ₹140 per share |
|---|---|
| Lot Size | 107 shares |
| Minimum Investment | ₹14,980 |
Financial Snapshot:
| Total Issue Size | Fresh Issue | Offer for Sale |
|---|---|---|
| 78,073,810 shares, aggregating up to ₹1,092.26 Cr | 42,912,087 shares, aggregating up to ₹600.77 Cr | 35,161,723 shares, aggregating up to ₹492.26 Cr |
Shareholding:
| Pre-Issue | Post-Issue |
|---|---|
| 322,477,605 shares | 365,389,692 shares |
IPO Managers and Registrar:
| Lead Managers | Registrar |
|---|---|
| ICICI Securities Limited, Bnp Paribas, Equirus Capital Private Limited, and JM Financial Limited. | Link Intime India Private Ltd. |
IPO Subscription Status:
The IPO received robust response across categories, with a total subscription of 2.24 times. The Qualified Institutional Buyers (QIBs) showed strong interest at 3.48 times, Non-Institutional Investors (NIIs) subscribed 1.49 times, and retail investors subscribed 1.88 times.
Fedbank Financial Services IPO Timeline:
| IPO Open Date | IPO Close Date | Basis of Allotment | Listing Date |
|---|---|---|---|
| November 22, 2023 | November 24, 2023 | November 28, 2023 | November 30, 2023 |
Lot Size:
Investors can bid for a minimum of 107 shares, and the table below outlines the minimum and maximum investment by retail and High Net Worth Individual (HNI) investors:
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 107 | ₹14,980 |
| Retail (Max) | 13 | 1391 | ₹194,740 |
| S-HNI (Min) | 14 | 1,498 | ₹209,720 |
| S-HNI (Max) | 66 | 7,062 | ₹988,680 |
| B-HNI (Min) | 67 | 7,169 | ₹1,003,660 |
Fedbank Financial Services IPO Reservation:
The IPO includes a reservation of 813,008 shares for employees, offered at a discount of Rs 10 to the issue price.
About Fedbank Financial Services Limited:
Established in 1995 and a subsidiary of The Federal Bank Limited, Fedbank Financial Services Limited provides Gold Loans, Home Loans, Loan Against Property (LAP), and Business Loan Services. The company has a Phygital doorstep model, combining digital and physical initiatives, serving customers across various products.
Financial Performance:
Fedbank Financial Services Limited reported a significant growth in revenue and profit after tax between March 31, 2022, and June 30, 2023. The company's outstanding borrowings and financial indicators reflect a strong financial position.
| Metric | Values |
|---|---|
| Revenue Increase | 37.46% |
| Profit After Tax Rise | 74.11% |
Key Performance Indicators:
| KPI -(Key Performance Indicators) | Values |
|---|---|
| ROE | 14.36% |
| RoNW | 13.29% |
Objects of the Issue:
The net proceeds from the IPO will be utilized for augmenting the company's Tier I capital base and meeting offer expenses.
Conclusion:
Fedbank Financial Services IPO witnessed a positive market response, reflecting investor confidence in the company's growth prospects. With a well-defined strategy and robust financials, Fedbank Financial Services is poised for potential long-term success in the financial services sector. Investors looking for medium to long-term rewards may find this IPO appealing.
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