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FEDBANK FINANCIAL SERVICES LTD IPO

IPO Details

-
-
107 Shares
-
₹ 133 – 140
₹ Up to 1092.26 Cr

Issue timeline

  • -
  • 28-Nov-2023
  • 29-Nov-2023
  • 29-Nov-2023
  • 30-Nov-2023

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

About Company

- A retail focused NBFC promoted by The Federal Bank Limited. The fastest growing gold loan NBFC among the gold loan peer set in India as of March 31, 2021 (Source: CRISIL Report)

- The company operates a “twin engine” business model, with two complementary products, namely gold loans and instalment loans to MSMEs and emerging self-employed individuals (Source: Company DRHP)

Strengths & Risks

Strengths (3)

Presence in large, underpenetrated markets with strong growth potential
The Indian retail credit market is large, has good growth prospects. The credit gap is much larger in case of ESEIs and the company is focused on catering to their financial needs. As of September 30, 2021, the company is present in 15 states and union territories across India with a strong presence in Southern and Western regions of India (Source: CRISIL,  Company DRHP)

Risks (2)

The business and operations are dependent on ability to timely access cost effective sources of funding. Any disruption in sources of funding could have an adverse effect on business.
The liquidity and profitability of business depends, in large part, on timely access to, and the costs associated with, raising funds. Ability to raise funds on acceptable terms, at competitive rates and in a timely manner, depends on various factors. A liquidity shortage for the industry as a whole may adversely affect cash flows (Source: Company DRHP)

  • Presence in large, underpenetrated markets with strong growth potential
    The Indian retail credit market is large, has good growth prospects. The credit gap is much larger in case of ESEIs and the company is focused on catering to their financial needs. As of September 30, 2021, the company is present in 15 states and union territories across India with a strong presence in Southern and Western regions of India (Source: CRISIL,  Company DRHP)

  • Twin engine business model ensures growth and risk insulation across economic cycles
    The company has a “twin engine” business model, which focuses on two complementary retail products, namely instalment loans to ESEIs and MSMEs, and gold loans. The credit demand from ESEIs and the MSME segments drives business growth when there is an upturn in the economy and the demand for gold loans drives business growth when there is a downturn (Source: Company DRHP)

  • Well diversified funding profile with an advantage of lower cost of funds
    The ability to access diversified sources of funding is a key contributor to company's growth. They intend to continue to diversify funding sources, identify new sources with the aim of further optimizing borrowing costs and help expand net interest margin.(Source: Company DRHP)

  • The business and operations are dependent on ability to timely access cost effective sources of funding. Any disruption in sources of funding could have an adverse effect on business.
    The liquidity and profitability of business depends, in large part, on timely access to, and the costs associated with, raising funds. Ability to raise funds on acceptable terms, at competitive rates and in a timely manner, depends on various factors. A liquidity shortage for the industry as a whole may adversely affect cash flows (Source: Company DRHP)

  • Risk of non-payment or default by the borrowers may adversely affect business.
    The company primarily serve ESEIs and MSMEs. Customers may default in their repayment obligations due to various reasons, they may not have credit histories or formal income proofs to assess their creditworthiness. Losses on account of customer defaults, may adversely affect business (Source: Company DRHP)

Financials

Net worth
Total Borrowings
Profit for the year
Earnings Per Share

Industry Overview

- NBFC credit to move marginally faster than systemic credit: At the end of Fiscal 2021, the overall banking credit grew by approximately 5.4% on year while NBFCs witnessed a growth of 8.8% during the same period. With the effect of COVID-19 waning, growth is expected to improve further, leading to banking credit growth of 9-10% and NBFC credit growth of 11-12% respectively, between Fiscals 2021 and 2025.(Source: Company DRHP)


- Gold loans market has witnessed consistent growth over the last decade  : In Fiscal 2021, the demand for gold loan finance witnessed a massive spurt in AUM from ₹ 3.3 trillion to ₹ 4.7 trillion, as India’s economy coped with the devastating effect of COVID-19 pandemic supported by player’s continued focus to acquire unorganized gold loan market by means of awareness and diversifying their regional presence with the help of branch as well as digital channels. (Source: Company DRHP)

vishal-mega-mart IPO

Fedbank Financial Services Ltd IPO

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107 Shares

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

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*The financials mentioned above are sourced from DRHP/ RHP documents.

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