Fedbank Financial Services Limited IPO
1. Market Focus: The company primarily targets the micro, small, and medium enterprises (MSMEs) and emerging self-employed individuals (ESEIs) sector in India. According to a CRISIL Report, this market segment is largely underserved by traditional lending institutions, presenting an opportunity for the company to grow and expand rapidly.
2. Product Suite: The company offers a range of financial products tailored to match the needs of its customers. These products include mortgage loans (housing loans, small ticket loan against property, medium ticket loan against property), unsecured business loans, and gold loans.
3. Growth and Performance: The company has demonstrated impressive growth and performance. It has the second-lowest cost of borrowing among its peers in the MSME, gold loan, and MSME & gold loan sectors in India in Fiscal 2023. It also achieved the third-fastest growth in assets under management (AUM) among NBFCs in its peer group, with a three-year CAGR of 33% between Fiscals 2020 and 2023.
4. Loan Asset Security: The majority of the company’s loan assets (85.98%) are secured against tangible assets, such as gold or customer’s property. This reduces the risk associated with defaults and non-performing assets (NPAs).
5. Financial Ratings: The company has received favorable ratings for its non-convertible debentures (NCDs) and bank loans, which adds to its credibility and trustworthiness in the market.
6. Promoter Backing: The company is promoted by The Federal Bank Limited, which is a well-established and trusted institution. The Federal Bank continues to own more than 51% of the company’s outstanding share capital, providing additional trust and stability.
7. Geographical Presence: The company is headquartered in Mumbai, Maharashtra, and has a presence in 16 states and union territories across India, with a strong focus on the Southern and Western regions. These regions contribute significantly to India’s GDP.
8. Branch Network: The company operates through 575 branches in 191 districts, and it has dedicated micro-sites for each of its branches to engage with customers effectively.
9. “Phygital” Model: The company uses a “Phygital” model, which combines digital and physical initiatives to provide customized services to customers. This approach helps maintain continuous customer engagement and utilizes technology for underwriting.
10. Underwriting Process: The company’s underwriting process combines electronic data and physical information and document collection. It uses APIs to validate information and make creditworthiness determinations. This process has been effective in managing defaults and NPAs.
11. Focus on Employees: The company places a strong emphasis on its employees and has been certified as a “Great Place to Work” for three consecutive years.
12. Mission: The company’s mission is to empower emerging India by providing easy access to loans, with a focus on addressing the loan requirements of underserved customer segments.
Objects of the Fedbank Financial Services Limited IPO:
Fedbank Financial Services Limited IPO Details:
|Open Date:||Nov 22 2023|
|Close Date:||Nov 24 2023|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Book Built Issue IPO|
|Issue Size:||1,092.26 Cr.|
|Lot Size:||107 Shares|
|Issue Price:||₹ 133 to ₹140 Per Equity Share|
|Listing Date:||Dec 05 2023|
Promoters And Management:
Financials of Fedbank Financial Services Limited IPO:
Particulars ( In Crore )
|Revenue from Operations||692||869||1,179||361|
|Fees and commission expenses||12||15||23||5|
|Impairment on financial instruments||71||84||49||11|
|Employee benefits expenses||132||175||248||69|
|Depreciation & Amortisation||27||37||42||9|
Comparison With Peers:
|Name of the Company||Revenue (In Crore)||PAT (In Crore)||EPS ( in Rs)||P/E||CMP||Mcap (In Crore)|
|Fedbank Financial Services Limited||1,179||180||4.88||28.7||140||5,166|
|Aptus Value Housing Finance India Ltd||1,093||503||10.10||26.4||292||14,542|
|IIFL Finance Ltd||8,412||1,608||39.44||13.8||608||23,186|
|Five-Star Business Finance||1,521||604||20.71||33.2||801||23,369|
|Manappuram Finance Limited||6,684||1,500||17.67||7.1||156||13,187|
|Muthoot Finance Limited||10,515||3,474||86.52||14.4||1,346||54,042|
|SBFC Finance Limited||734||150||1.67||52.5||89.5||9,531|