Fedbank Financial Services LTD. IPO: Review, Valuation & GMP

Fedbank Financial Services Limited IPO - Complete Overview

Fedbank Financial Services, backed by The Federal Bank, is a company that assists people with their finances. They specialize in providing loans to small businesses and individuals, boasting the second-lowest borrowing costs in India as of 2023.

Experts consider them reliable, with positive ratings since 2018. Supported by The Federal Bank, even after making shares available to the public, The Federal Bank will retain majority ownership. They attribute their success to their experience, good track record, and the trust associated with the "Federal Bank" name.

As of March 31, 2023, Fedbank Financial Services has offices in 191 districts across 16 states and union territories in India, primarily in the Southern and Western regions, including Andhra Pradesh (including Telangana) and Rajasthan.

 

What does the company do?

They offer different types of loans, like loans for homes, small loans using property as a guarantee, medium-sized property loans, unsecured business loans, and gold loans. Fedbank uses a mix of digital and in-person services to give personalized help to customers.

 

Fedbank Financial Services Limited IPO Overview

Fedbank Financial Services Limited IPO date is slated to be open for subscription from November 22, 2023, to November 24, 2023. This BSE NSE IPO follows a Book-Built Issue IPO.

The Fedbank Financial Services Limited IPO price is not fixed. The upcoming BSE NSE IPO will be listed on December 5, 2023.

The total issue size of this IPO amounts to Rs. 1,100.00  Crores. Within this total issue, 35% is issued to retail investors.

 

Fedbank Financial Services Limited IPO timetable (Tentative)

Events	Date
IPO Opening Date	22 November 2023
IPO Closing Date	24 November 2023
IPO Allotment Date	30 November 2023
Refund initiation	1 December 2023
IPO Listing Date	5 December 2023

 

Fedbank Financial Services Limited IPO Details

IPO Opening & Closing Date	22 November to 24 November 2023
Face value	Rs. 10 per Share
Issue Price	Coming Soon
Lot Size	Coming Soon
Price of 1 lot	Coming Soon
Total Issue Size	[.] shares (aggregating up to Rs. 1,100.00 Cr)
Offer for Sale	70,323,408 shares of Rs.10 (aggregating up to Rs. 350.00 Cr)
Fresh Issue	[.] shares (aggregating up to Rs. 750.00 Cr)
Listing at	BSE NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

Fedbank Financial Services Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	13 Lot
Minimum Lot Investment (HNI)	14 Lot

 

 

Fedbank Financial Services Limited IPO Reservation

Institutional share Portion	50%
Non-institutional share Portion (HNI)	15%
Retail share Portion	35%

 

Company Financial

(Amount in Crores)

Period	FY 23	FY 22	FY 21
Total Assets	9,070.99	6,555.71	5,466.31
Total Revenue	1,214.68	883.64	697.57
PAT	180.13	103.46	61.68
Net worth	1,355.68	1,153.52	834.73
Reserve & Surplus	1,021.52	832.00	544.45
Total Borrowings	7,135.82	5,016.84	4,328.09

 

Revenue-Breakdown by Segment

Segment Revenue	FY 23	FY 22	FY 21
Retail Finance	11,147.91	8,158.16	6,361.75
Distribution	6,361.75	260.27	237.60
Wholesale Finance	31.9	130.31	396.18
Total	11,520.51	8,548.73	6,995.53

 

Revenue By Operations

(Amount in Million)

Particulars	Mar 31 FY 23	FY 22	FY 21
Revenue from Operations
Interest income	11,101.68	8,218.93	6,581.08
(b) Fee and commission income	560.10	428.85	317.36
(c) Net gain on fair value changes	126.22	45.37	19.81
Total	11,788.00	8,693.15	6,918.25
Other income	358.80	143.22	57.41

 

The objective of the Issue

The company intends to use the net proceeds for the following objectives.

• Adding more money to the company's main capital to handle future needs as the business grows.
• Taking care of the expenses involved in making the offer.

 

Promoters of Fedbank Financial Services Limited IPO

The company's promotor is The Federal Bank Limited

Pre-issue Promoter shareholding	98.77%
Post-issue Promoter shareholding	-

 

Fedbank Financial Services IPO Lead Managers

• ICICI Securities Limited
• Bnp Paribas
• Equirus Capital Private Limited

 

Peers of Fedbank Financial Services Limited IPO

Name of the Company	Total Revenue (in million)	P/ E	EPS (Basic) (Rs.)
Fedbank Financial Services Limited	12,146.80	--	5.60
Aptus Value Housing	11,289.99	27.04	10.11
Manappuram Finance Limited	67,499.50	7.28	17.72
Muthoot Finance Limited	119,750.05	14.29	89.99
IIFL Finance	84,471.10	14.52	39.49
Five Star Business Finance	--	31.73	20.71

 

IPO's Valuations

Fedbank Financial Services Limited IPO’s EPS of Rs. 5.60. But the price is not declared so we cannot calculate the company's P/E ratio.

 

Dividend Policy

According to Fedbank Financial Services Limited's IPO, the company did not distribute dividends in the preceding fiscal years, and its capacity to declare dividends in the future hinges on its earnings and financial health.

 

IPO's Strengths

• Presence at large scale with strong growth potential
• Well-diversified funding profile with lower cost of funds
• Technology-driven company with a scalable operating model
• Focus on retail loan products using a collateralized lending model, targeting individuals and the emerging MSME sector
• Strong underwriting capability and presence in select customer segments
• Robust risk management focused on effective underwriting and collections
• Experienced, cycle-tested management team

 

IPO's Weaknesses

• Trouble securing money for daily business needs
• Difficulty assessing and recovering the full value of collateral for loans
• High concentration of loans to new businesses, posing a risk of non-payment
• Subject to periodic government inspections, non-compliance could be problematic
• Struggling to maintain loan quality and manage a growing portfolio.

 

IPO GMP Today

The Latest GMP of Fedbank Financial Services Limited IPO is Rs.5.

 

Conclusion

To reach any conclusion we need to wait for company pricing of share.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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