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The initial public offering of Federal Bank’s subsidiary, Fedbank Financial Services, was subscribed 38 per cent at the end of Day 1 on Wednesday. The IPO received bids for 2.14 crore shares, against 5.59 crore shares on offer, according to BSE data.
The public issue, with a price band of Rs 133-140 a share, will close on Friday.
The Rs 1,092-crore issue consists of a fresh issue of 4.29 crore shares aggregating to Rs 600.77 crore, and an offer-for-sale (OFS) of 3.52 crore shares to the tune of Rs 492.26 crore.
The lot size is 107 equity shares. While Federal Bank will offload 1.65 crore shares, True North Fund VI LLP will divest 5.38 crore shares.
Fedbank Financial Services IPO: Promising franchise at a decent valuation
Fedbank Financial Services has reserved not more than 50 per cent of the shares for Qualified Institutional Buyers (QIB), not less than 15 per cent for Non-Institutional Investors (NII), and not less than 35 per cent of the offer for retail investors. It also has a quota for employees, who will get a discount of Rs 10 a share. The retail segment of the IPO witnessed decent demand, with a subscription rate of 67 per cent, while the non-institutional investors’ quota was subscribed 21 per cent, and the employee portion 37 per cent. The QIB portion remained muted.
The issue proceeds will be used to augment its Tier-I capital base to meet its future capital requirements and offer expenses.
Anchor investors
Fedbank Financial Services on Tuesday raised Rs 325 crore from anchor investors ahead of its initial public offering (IPO). The company has allotted 2.32 crore equity shares to 22 funds at Rs 140 per piece, according to a circular uploaded on the BSE web site.
Among investors who participated in the anchor book were Goldman Sachs (Singapore) Pte, Copthall Mauritius Investment Ltd, Integrated Core Strategies (Asia) Pte, Citigroup Global Markets Mauritius, Bandhan Mutual Fund (MF), HDFC MF and Edelweiss MF. SBI Life Insurance Company, HDFC Life Insurance Company, Kotak Mahindra Life Insurance Company, Tata AIA Life Insurance Company and Bajaj Allianz Life Insurance Company are among the other investors.
ICICI Securities, BNP Paribas, Equirus Capital and JM Financial are the book-running lead managers of the IPO.
Pre-IPO placement
On Monday, the company raised Rs 330 crore in a pre-IPO placement round. SBI Life Insurance, Star Union Dai-chi, Yasya Investments, Nuvama Crossover III, and Nuvama Crossover IIIA were some of the key investors in the round, comprising 23,57,148 equity shares at the upper end of the price band of Rs 140 apiece.
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