On Thursday, Shyam Srinivasan, chief executive of Federal Bank said that the non-banking financing arm of Federal Bank, Fedfina is reconsidering its capital raising options after a regulatory approval received earlier lapsed.
Fedbank Financial Services Ltd (Fedfina) has over 463 branches catering to gold loan, home loan, loan against property and business loan.
After announcing the bank’s Q1 financial result, Srinivasan said, “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.”
He said that the company in which the bank holds a 74% stake, was performing well and the bank will continue to be a majority shareholder.
Srinivasan denied reports that the bank has paused a stake sale in Fedfina. According to reports, on 27th June the bank was unable to reach a consensus with prospective investors over the valuation of Fedbank Financial Services Ltd.
On Federal Bank’s fundraise plans, Srinivasan said that the bank was looking to raise funds in FY24 and is working on it.
He said, “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.”
