Federal Bank to consider fund raising up to ₹1,000 crore through Tier 2 bonds

“Pursuant to Regulation 29(1)(d) and 29(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that the meeting of the Board of Directors of the Bank is scheduled to be held on Saturday, March 18,2023, at Federal Towers, Marine Drive, Kochi to consider and approve, inter-alia, the proposal to raise funds by way of issue of Unsecured Basel III Tier-II Subordinate Bonds in the nature of Debentures, amounting up to Rs. 1000,00,00,000/- (Rupees One Thousand Crores only) on a private placement basis,” said Federal Bank in a stock exchange filing.

Bloomberg has recently reported that Federal Bank Ltd. may raise up to $242 million, or ₹2,000 crores, in its non-banking financial company Fedbank Financial Services Ltd. FedFina is aiming for a valuation of approximately Rs. 5,000 crore in the stake sale and could debut its scheduled IPO in early 2024. Federal Bank recorded a stake of 73.2% in Fedbank Financial Services during Q3FY23. The bank’s board of directors had given their permission in January 2022 to begin the procedure of an initial public offering (IPO) through a fresh issuance and offer for sale however in order to raise $9 billion, the company released a draft IPO prospectus in February 2022.

The shares of Federal Bank closed today on the NSE at ₹126.65 apiece, down by 0.86% from the previous close of ₹127.75. The stock recorded a total volume average of 71,83,525 shares compared to the 20-Day volume average of 88,16,362 shares. In the last 1 year, the stock gained 28.77% and on a YTD basis it has fallen 8.02% so far in 2023. The stock touched a 52-week-high of ₹143.40 on (16-Jan-2023) and a 52-week-low of ₹82.50 on (26-May-2022). During Q3FY23, the company recorded FIIs shareholding of 27.72%, DIIs stake of 42.33% and a public stake of 29.96%.