The board of directors of Federal Bank will meet on July 21 to consider issuing up to 72.68 million equity shares on a preferential basis to International Finance Corp, IFC Financial Institutions Growth Fund and IFC Emerging Asia Fund at `131.91 apiece, the lender informed exchanges late on Tuesday.
Upon consummation of the transaction, the investors shall in aggregate hold up to 177,528,442 equity shares of the bank, the notice said. The shares of the bank closed 0.67% higher at `135.70 apiece on the Bombay Stock Exchange.
Further, the bank’s board will also consider raising funds via additional tier-I bonds, tier-II bonds, long term bonds, masala bonds, ESG bonds, or non-convertible debentures as may be permitted by the Reserve Bank of India from time to time on a private placement basis on July 21, the notice said.
The bank’s board had earlier approved raising up to `4,000 crore in FY24, MD & CEO Shyam Srinivasan told reporters during a post Q1FY24 earnings presser.
The proposal to raise funds by Federal Bank comes at a time when its non-banking finance company subsidiary Fedbank Financial Services or FedFina has also revised its plans for an initial public offering. FedFina had, in February 2022, filed draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for IPO but could not pursue its plan due to volatile market conditions.
Federal Bank, on July 13, reported its Q1FY24 net profit at Rs 853.7 crore, up 42% on a year-on-year basis, largely led by a robust rise in net interest income (NII) and stable asset quality. Though the April-June bottomline is higher than Bloomberg estimate of `775 crore, it is lower 5% on a sequential basis.