Fedbank Financial Services Limited

About  Fedbank Financial Services Limited

Incorporated in 1995, Fedbank Financial Services is a retail-focused non-banking finance company (NBFC) promoted by The Federal Bank. As of 31 March 2023, it is one India’s fastest growing gold loan NBFCs.

The bank caters to MSMEs (Micro, Small and Medium Enterprises) and ESEIs (Emerging Self-Employed Individuals) by providing mortgage loans such as housing loans, small ticket LAP (Loan Against Property), medium ticket LAP, unsecured business loans, and gold loans. 

As of 31 March 2023, it has a network of 575 branches spanning 191 districts in 16 states and union territories across India, with a strong presence in Southern and Western regions. Meanwhile, based on a CRISIL report, these states contribute over 75% of India’s GDP as on 31 March 2022. 

The bank has been certified as a ‘Great Place to Work’ for three consecutive years and employs 3,570 personnel as of 31 March 2023. It also operates a ‘Phygital’ (physical+digital) doorstep model for providing services, managing operations, and collecting and integrating data. 

Between FY21 and FY23, it saw a CAGR rise of 23% in its AUM, 19% in its revenue from operations and 42% in its profit. It is promoted by the Federal Bank, which will continue to own more than 51% of its outstanding shares even after the completion of the offer. Moreover, it operates in the ESEI and MSME segments, which is largely unaddressed by lending institutions in India. All of these could be beneficial for the company.

And now, Fedbank Financial Services Limited is coming out with its initial public offer (IPO). The IPO will be an offer for sale as well as a fresh issue. The money raised through the fresh issue will be utilised to augment the company’s capital base for future requirements. Its shares will be listed on the NSE and the BSE. 

Here are key details about the Fedbank Financial Services Limited IPO:

Financial snapshot

Here’s a quick look at Fedbank Financial Services Limited IPO’s strengths, weakness, opportunities and risks (SWOT analysis)

Strengths and opportunities

1. Present in large, underpenetrated markets with a strong potential for growth, the portfolio of MSME loans is expected to grow at a CAGR of 14%-16% between FY23 and FY25. 
2. Well-diversified funding profile with the advantage of lower cost of funds.
3. Operates a difficult to replicate collateralised lending model as 85% of its total loan assets are secured against tangible assets such as gold or property as of 31 March 2023. 
4. Prudent customer selection and risk management policies, as 86% of its customers have an established credit history, 77% of which have a CIBIL score of 650+ as of 31 March 2023. 
5. Technology-driven company with an aggregate investment of ₹25 crore in IT and digital systems in the last three years.

Risks and threats

1. Subject to periodic inspection by the Reserve Bank of India and operates in a highly regulated industry. 
2. Affected by volatility in interest rates for both its lending and treasury operations. 
3. Faces competition from established Indian and foreign commercial banks, NBFCs, HFCs (Housing Finance Companies), small finance banks, lending platforms and private unorganized and informal financiers who principally operate in the local market.
4. Operates in a cyclical industry. Hence, in an economic downturn, the company may not be able to grow its business.  

Fedbank Financial Services Limited IPO details

|Fedbank Financial Services Limited IPO date

According to the offer document filed by the company with the SEBI, the Fedbank Financial Services IPO’s opening date – in other words, the Fedbank Financial Services IPO launch date – will be 22nd November 2023. The Fedbank Financial Services IPO closing date is 24th November 2023. After this, investors will be updated about the allotment status on 30th November 2023.

Investors, who have been allotted shares, can expect them to be credited to their demat account on 4th December 2023. The Fedbank Financial Services IPO listing date is 5th December 2023. The listing date is the date on which the shares of a company get listed on the bourses – NSE and BSE. 

|Fedbank Financial Services Limited IPO Price Band

The IPO is an offer for sale as well as a fresh issue. The Fedbank Financial Services IPO price band has been set between  ₹ 133 and  ₹ 140 per share. Interested investors can choose a price within this band to apply for the IPO. 

The Fedbank Financial Services IPO listing price will be determined on 5th December 2023. The listing price is the price at which a company’s shares debut on the stock exchanges.

|Fedbank Financial Services Limited IPO Lot size

The Fedbank Financial Services IPO details have been declared. The Fedbank Financial Services IPO lot size is set at shares and an investor can apply for a minimum of 1 lot. Meanwhile, the Fedbank Financial Services IPO issue size is approx ₹1,100 crore. 

How to pre-apply for the Fedbank Financial Services Limited IPO?

You can pre-apply for the Fedbank Financial Services Limited IPO on Upstox. The pre-application for this IPO, which means pre-apply open date, usually begins a day before the IPO opens for subscription. 

Follow these steps to pre-apply for the IPO: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Fedbank Financial Services Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Pre-Apply’
7. Accept the mandate on your UPI app

How to apply for the Fedbank Financial Services Limited IPO?

If you are interested in this investment opportunity but unsure how to apply for the Fedbank Financial Services Limited IPO, here we are listing out the steps for you. 

When the public issue opens for subscription, one can follow this step-by-step guide on how to apply for the Fedbank Financial Services Limited IPO on Upstox: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Fedbank Financial Services Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

How to check the Fedbank Financial Services Limited IPO allotment status?

When the allotment process is completed, you can check the status of your application on the Upstox app. Share allotment is generally done around five to six days after an IPO closes. 

Here’s a step-by-step guide on how to check the Fedbank Financial Services Limited IPO allotment status:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover page, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, you will find the ‘View all’ option
5. Once you click on ‘View all’, you will be directed to the ‘IPO’ tab
6. In the ‘IPO’ tab, click on ‘My applications’ 
7. In ‘My applications’, under the History section, your Fedbank Financial Services Limited IPO allotment status will be mentioned

Check Allotment Status

Open a demat account with Upstox to apply for the Fedbank Financial Services Limited IPO

To apply for the Fedbank Financial Services Limited IPO, you need to mandatorily have a demat account. A demat account helps you hold the shares you buy in a dematerialised format. If you don’t have a demat account yet, you can open one with Upstox by visiting our website or by downloading the app.

Here is a step-by-step guide on how to open a demat account with Upstox:

1. Click here to visit the demat account opening page on the Upstox website. 
2. Enter your phone number and other essential details to begin opening a demat account.
3. Upload the scanned copies of your PAN, Aadhaar card, a cancelled cheque, and your bank statement as needed. 
4. Complete the e-verification using the OTP sent to your registered mobile number. 

This is all it takes to open a demat account with Upstox. Easy and quick, right? 

Open Demat Account

Upstox – trading app to apply for the Fedbank Financial Services Limited IPO

Applying for IPOs with Upstox is extremely easy. The user-friendly interface and top-notch security make Upstox one of the leading trading apps in India.

You can apply for the Fedbank Financial Services Limited IPO on Upstox, provided you have a demat account. As mentioned in the previous section, you can simply follow the steps to open a demat account with Upstox. The biggest advantage is that when you apply for an IPO using your Upstox account, the brokerage charges are zero.

In fact, courtesy of its robust features and minimal charges, Upstox is among the most preferred trading apps. Lakhs of Indians trust Upstox as it is a reliable trading platform that makes IPO applications easy.