Federal Bank arm Fedfina reconsidering capital raising options, says CEO Srinivasan

livemint.com:

Federal Bank’s non-banking financing arm Fedfina is reconsidering capital raising options after a regulatory approval received earlier lapsed, the bank’s chief executive Shyam Srinivasan said on Thursday. “The company had filed a Draft Red Herring Prospectus (DRHP) last year and was exploring a capital raise but the markets were not that friendly at that point in time," Srinivasan said after announcing the bank’s Q1 financial results. He said the company, in which the bank holds a 74% stake, was performing well and the bank will continue to be a majority shareholder.

“We have a resolution by the board that we will remain a majority investor as long as the regulations permit," he said. Srinivasan denied reports that the bank has paused a stake sale in Fedfina. Bloomberg reported on 27 June that the bank has been unable to reach a consensus with prospective investors over the valuation of Fedbank Financial Services Ltd.

“I also read the same thing you all read and not sure where that emerged from," said Srinivasan. Fedbank Financial Services Ltd (Fedfina) received its NBFC license in 2010, and has over 463 branches catering to gold loan, home loan, loan against property and business loan. On Federal Bank’s fundraise plans, Srinivasan said that the bank was looking to raise funds in FY24 and is working on it.

“I cannot comment on when and how much. We are in the process. We are evaluating many things but at this point in time what we have in hand is a shareholder approval to go up to ₹4,000 crore in the form of a QIP and or a preference and that is our permissible limit," he said.