About Company

• Promoted by The Federal Bank Ltd, Fedbank Financial Services Ltd (“Fedfina”) was incorporated on April 17, 1995. Fedfina is a retail focused non-banking finance company (“NBFC”) has the 2nd and 3rd lowest cost of borrowing among the micro, small and medium enterprises (“MSMEs”), gold loan and MSME & gold loan peer set in India in Fiscal 2023 and 3-months period ended June 30, 2023, respectively.

• As on March 31, 2023, Fedfina had the 3rd fastest AUM growth among NBFCs in the peer set in India with a 3 year CAGR of 33% between Fiscals 2020 and 2023, and the 4th fastest year-on-year AUM growth of 42% for 3-months period ended June 30, 2023.

• They are one among 5 private banks promoted NBFCs in India. They are the fastest growing gold loan NBFC in India among the peer set as of March 31, 2023, and had the fastest year-on-year growth among gold loan NBFCs in India as of June 30, 2023. As on June 30, 2023, 86.24% of their total Loan Assets are secured against tangible assets, namely gold or customer’s property.

• The company focuses on catering to the MSMEs and the emerging self-employed individuals (“ESEIs”) sector. They have a well-tailored suite of products targeted to match their customers’ needs, which includes mortgage loans such as housing loans; small ticket loan against property (“LAP”); and medium ticket LAP, unsecured business loans, and gold loans. They had the 3rd highest growth in disbursement among the peer set with a 3-year CAGR of 35% between Fiscals 2020 and 2023. Their mortgage loans, gold loans and the unsecured business loans had an AUM of ? 4,702.45 crore, ? 3,124.17 crore and ? 1,487.25 crore, respectively as on June 30, 2023.

• As of June 30, 2023, Fedfina has presence in 17 states and union territories across India with a strong presence in Southern and Western regions of India. As of June 30, 2023, they covered 190 districts in 17 states and union territories in India through 584 branches. Their branches are located in states, such as Andhra Pradesh (including Telangana) and Rajasthan.

• Fedfina also has a “Phygital” doorstep model, a combination of digital and physical initiatives, for providing customized services to their customers across all of their products. This also helps them to constantly remain in touch with their customers.

Strengths

• Present in large, underpenetrated markets with strong growth potential;
• Focus on retail loan products with a collateralized lending model targeting individuals and the emerging MSME sector;
• Strong underwriting capability and presence in select customer segment combined with robust risk management capabilities focused on effective underwriting and collections; 
• Experienced, cycle tested management team;
• Well diversified funding profile with an advantage of lower cost of funds;
• Technology driven company with scalable operating model.

Company Promoters

Company Financials

Fedbank Financial Services Limited's revenue increased by 37.46% and profit after tax (PAT) rose by 74.11% between the financial year ending with March 31, 2023 and March 31, 2022.

Objects of the Issue

1. Augmenting the company's Tier I capital base to meet the company's future capital requirements, arising from the growth of the business and assets.
2. Meeting offer expenses.