(Bloomberg) -- India's Federal Bank Ltd. is holding off on a stake sale in its non-banking financial unit that could have raised as much as 20 billion rupees ($244 million), according to people familiar with the matter.
The Mumbai-listed bank has been unable to reach a consensus with prospective investors over the valuation of Fedbank Financial Services Ltd., the people said, asking not to be identified as the information is private. Federal Bank also paused the deal because it wants to focus on a fundraise to tap investors for as much as 40 billion rupees, one of the people said.
Read More: Federal Bank Eyes Up to $486 Million Fundraising
FedFina, as the lender is known, was seeking a valuation of about 50 billion rupees in the stake sale and was working with advisers on a potential deal, Bloomberg News reported in March. The deal may have included existing FedFina shares from Federal Bank as well as private equity firm True North, people familiar with the matter have said.
Deliberations are ongoing and Federal Bank could revive the stake sale in FedFina anytime, the people said. A representative for Federal Bank declined to comment, while True North didn't immediately respond to requests for comment.
Shares of Federal Bank have fallen about 12% this year, giving the lender a market value of about $3.1 billion.
Acquiring an NBFC license in 2010, FedFina has more than 573 branches across the country, according to its website. It offers products including home loans, business loans and loans secured by gold and other property.
FedFina filed a draft IPO prospectus in February 2022 to raise 9 billion rupees. The unit will likely pursue a listing in the next year or so, Federal Bank Chief Executive Officer Shyam Srinivasan told Bloomberg News in an interview in May.
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