Fedbank Financial Services Ltd. has filed a draft red herring prospectus for an initial public offering.
Through this, the Federal Bank Ltd.'s non-banking financial unit looks to raise Rs 750 crore through fresh issuance of equity shares at a face value of Rs 10 each, according to filing with the market regulator SEBI. Fedfina is also looking at selling 7.03 crore equity shares through an offer for sale.
The OFS comprises up to 1.6 crore equity shares by the promoter shareholder, the Federal Bank, and around 5.4 crore equity shares by another shareholder, True North Fund VI LLP, the Securities and Exchange Board of India said.
The net proceeds from the fresh issue will be used for augmenting the Tier 1 capital base in order to meet future capital requirements. However, a bank of these proceeds is also expected to be utilised for meeting offer expenses, Fedfina said.
In June, the Federal Bank had paused a stake sale in Fedfina as it was unable to reach a consensus with prospective investors over the valuation, according to Bloomberg.
During the Q1 media conference call, Chief Executive Officer Shyam Srinivasan had also responded to reports of stake sale. "The company filed a DRHP last year and is reconsidering options for raising capital this year," he said. "We hold 74% of the company and we will continue to be the majority shareholder."
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