You are here: Home » Finance » News » Banks
Business Standard

Federal Bank approves to sell 26% stake in subsidiary to True North

The investment will help FedBank Financial Services Limited augment its capital base primarily to support its growing asset business and to grow its branch network

Press Trust of India  |  Kochi 

Shyam Srinivasan, managing director & chief executive, Federal Bank
Shyam Srinivasan, managing director & chief executive, Federal Bank

The Board of has approved 26 per cent strategic investment by homegrown private equity player in its wholly-owned subsidiary FedFina subject to statutory and regulatory approvals.

The investment will help augment its capital base primarily to support its growing asset business and to grow its branch network, the Kerala-based bank said in a statement.

It will help further improve the company's financial fundamentals by strengthening its capital adequacy and diversifying its funding sources, the bank said.

managing director and CEO, said the bank was happy to welcome onboard.

"We consider this investment by an endorsement of the business outlook and capabilities of FedFina. This transaction and the expertise that True North carries with it will turn out to be seminal in the growth and expansion of FedFina," he said.

True North partner, Divya Sehgal said, "We are excited to work together with and the entire management team during this exciting and transformative time for FedFina which has continued to register impressive growth."

It (FedFina) has successfully built out its AUM (assets under management) of more than USD 200 million and intends to continue driving its next phase of growth by increasing its product offering and exploring cross selling to its current and potential customers, she added.

"The company's track record and explosive growth is a testament to FedFina's leadership team. Our investment in FedFina is a reiteration of our renewed sector focused investment strategy," Sehgal said.

Commenting on the transaction ICICI Securities executive vice-president, Pritish Kandoi, said, "We believe FedFina has built a strong SMSE lending franchise under the parentage of Federal Bank."


"We hope the company will evolve with this partnership and create a unique value proposition for its customers and stakeholders," he added.

ICICI Securities Limited was the exclusive financial advisor to the transaction.

FedFina, promoted and 100 per cent owned by Federal Bank, is an NBFC engaged in providing loans to individual and corporate borrowers, against the security of assets like gold and real estate property, for meeting personal and business expense and investment needs.

First Published: Sat, May 12 2018. 22:53 IST
RECOMMENDED FOR YOU