Fedbank Financial gains after board OKs to raise funds upto Rs 2,500-cr via debt

The company will issue non-convertible debentures (NCDs) in various forms, including secured or unsecured, redeemable or irredeemable, listed or unlisted and cumulative or non-cumulative. These instruments may feature fixed rates or be market-linked and may also include hybrid instruments.

Additionally, the company will also issue NCDs/ bonds qualifying as subordinated Tier II debt or perpetual debt instruments which may or may not be classified as being additional Tier I or Tier II capital under the provisions of the RBI Master Directions.

The fundraising will be executed through private placement in one or more tranches over a one-year period from the date of shareholder approval at the general meeting. The total amount to be raised is not exceeding Rs 2500 crore.

The said NCDs will offers to banks, financial institutions, non-banking financial companies(NBFC), corporates, Foreign Institutional Investors (FIIs), Qualified Foreign Investors (QFIs), Foreign Portfolio Investors (FPIs), insurance companies, and other authorized entities.

The company's board of directors, including the committee of directors (Operations), will finalize the specific terms and conditions of the NCDs, such as coupon rates, premium or discount and tenor, to ensure they align with the objectives and are advantageous to its interests.

Fedbank Financial Services is a subsidiary company of Federal Bank and has been engaged in financial services. It has a well-tailored suite of products targeted to match customers needs, which includes mortgage loans such as housing loans, small ticket loan against property (LAP) and medium ticket LAP, unsecured business loans, and gold loans.

The NBFC's standalone net profit rose 3.79% to Rs 70.23 crore in Q1 FY25 as compared with Rs 67.66 crore recorded in Q1 FY24. Total income grew by 14.79% year on year to Rs 490.99 crore during the quarter.