Federal Bank rises 5% on news of 26% stake aquisition in Equirus Capital

The stock was up 5% at Rs 94.15 on the BSE in early morning trade after the private sector lender said that it will pick up 26% strategic stake in Equirus Capital, a financial services company.

Federal Bank was up 5% at Rs 94.15 on the BSE in early morning trade after the private sector lender said that it will pick up 26% strategic stake in Equirus Capital Pvt Ltd (ECPL), a financial services company. Bank did not disclose the deal value.

“The Board of Directors of Federal Bank has approved acquiring a strategic minority stake of 26% in ECPL subject to statutory and regulatory approvals and satisfactory completion of financial and legal due diligence,” Federal Bank and Equirus said in a joint press release.

The Investment rationale has been driven by the need to increase the product offerings to a spectrum of wholesale clients by offering comprehensive financial solutions for Debt & Equity Capital Markets, Structured Finance, Capital Market products and Advisory. The strategic tie-up would help shore up non interest earnings for the Bank while creating additional revenue streams with identified clients, it added.

With a shift in client preferences, our foray into Investment Banking will help us participate in opportunities and instruments beyond traditional banking products. With our dominant position in the NR space and a strong customer base of over seven million, this will also help us provide superior wealth management offerings to our consumer bank clients, said Ganesh Sankaran, Executive Director, Federal Bank.

At 09:50 am; the stock was trading 4% higher at Rs 93.75 on the BSE, as compared to 0.38% rise in the S&P BSE Sensex. A combined 6.37 million shares changed hands on the counter on the BSE and NSE so far.