Federal Bank is reportedly considering a stake sale in its non-banking financial company subsidiary Fedbank Financial Services to raise `2,000 crore or $242 million.
Fedbank Financial Services is working with advisers on the potential stake sale. 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, a Bloomberg news report said quoting sources.
As on December 31, the private bank holds a 73.2% stake in Fedbank Financial Services.
In January 2022, the board of directors of the bank had approved initiating the process of an initial public offering (IPO) by way of fresh issue and offer for sale. The company filed a draft IPO prospectus in February 2022 to raise `9 billion.
Fedbank Financial Services, as the Mumbai-based non-bank lender is known, is seeking a valuation of around `50 billion in the stake sale. It could launch its planned IPO in 2024, the report said.
Fedbank Financial Services acquired receipt of its non-banking financial company (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.