The initial public offering (IPO) of Fedbank Financial Services, a non-banking financial company (NBFC) focusing on the micro, small, and medium enterprise (MSME) sector, concluded today with full subscription. The offering attracted significant interest from retail investors who subscribed 1.42 times their allocated quota. In contrast, non-institutional investors (NIIs) and qualified institutional buyers (QIBs) showed more modest engagement with subscription rates of 66% and 56%, respectively.
The IPO aimed to raise ₹1,092.26 crore by offering equity shares in a price range of ₹133-140 per share. The lot size for investors was set at a minimum of 107 equity shares. The issue included a fresh issuance of equity worth ₹600 crore and an offer-for-sale (OFS) by existing shareholders Federal Bank and True North Fund VI LLP.
Ahead of the IPO's final day, Fedbank had already secured ₹324.68 crore from anchor investors such as Societe Generale (OTC:SCGLY) and Goldman Sachs on Tuesday. These funds are earmarked for Tier-I capital growth and covering expenses related to the offer. ICICI Securities, BNP Paribas (OTC:BNPQY), and Link Intime India are managing the book-running process and serving as the registrar for the issue, respectively.
Despite trading at a grey market premium of ₹5 and offering a price-to-book value below the industry average, analysts have advised potential investors to approach with caution due to possible regulatory changes from the Reserve Bank of India that could impact financial ratios.
Fedbank's growth in FY23 was bolstered by increased net interest income and profit after tax, along with solid returns on assets (RoA) and equity (RoE). The NBFC operates in over seventeen regions, primarily serving the MSME sector. With the successful IPO, Fedbank is scheduled for listing on December 5, marking a significant step in its expansion strategy. Employees showed strong support for the offering, subscribing to 91% of their reserved shares at a discounted rate.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.