The IPO of Fedbank Financial Services Ltd has opened for investment today. The company is a retail focused NBFC targeting MSMEs and emerging self-employed individuals. The price band of IPO has been fixed at Rs 133-140.
The company has set a target of raising Rs 600.7 crore through 4.29 crore shares in fresh issue and Rs 492.26 crore through 3.52 crore shares in Offer for Sale (OFS).
Who is selling how many shares?
Through OFS, Federal Bank will sell 1.65 crore shares of the company, after which its stake will reduce from 73% to 61%. Also, True North Fund VI LLP will sell 5.38 crore shares, after which its stake will reduce from 25% to 8.5%.
Important information related to shares
- IPO opens: 22 November
- IPO closes: 24 November
- Issue size: Rs 1092.26 crore
- Price Band: Rs 133 to 140
- Fresh issue: Rs 4.29 crore
- OFS: Rs 3.52 crore
- Face value: Rs 10/share
How to use the funds?
The company will use the money raised through the fresh issue to meet the requirements of Tier-1 capital base.
The company has raised Rs 325 crore from anchor investors by selling 2.32 crore shares from 22 funds at a price of Rs 140/share.
Valuation Snapshot
Comparison with listed peers
| Company | EPS (Rs) | P/E (x) |
|---|---|---|
| Fedbank Financial Services | 5.60 | 25* |
| Aptus Value Housing | 10.10 | 28.5 |
| IIFL Finance | 39.50 | 15.5 |
| Five Star Business Finance | 20.70 | 37.5 |
| Manapurram Finance | 17.70 | 8.06 |
| Muthoot Finance | 86.50 | 15.39 |
Market research company Stoxbox said, ‘As per valuation as per FY23 book value, the price to book value (P/BV) of the company is 3.3 times more than the upper price band. Due to mostly positive factors, we advise investors to ‘subscribe’ to this issue.
