MUMBAI:
The Board of Directors of Federal Bank has approved 26% strategic investment by leading, homegrown private equity player True North in its Wholly Owned Subsidiary, FedBank Financial Services Limited (FedFina) subject to statutory and regulatory approvals.
The investment will help FedFina augment its capital base primarily to support its growing asset business and to grow its branch network. It will help further improve the company’s financial fundamentals by strengthening its capital adequacy and diversifying its funding sources.
Commenting on the investment, Shyam Srinivasan, MD & CEO, Federal Bank said, “We are happy to welcome True North onboard. We consider this investment by True North an endorsement of the business outlook and capabilities of FedFina. This transaction and the expertise that True North carries with them will turn out to be seminal in the growth and expansion of FedFina.”
On the occasion, Divya Sehgal, Partner, True North said, “We are excited to work together with Federal Bank and the entire management team during this exciting and transformative time for FedFina which has continued to register impressive growth. It has successfully built out its AUM of more than US$ 200mn 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. The Company’s track-record and explosive growth is a testament to the FedFina’s leadership team.
Our investment in FedFina is a reiteration of our renewed sector focused investment strategy.” Commenting on the transaction Pritish Kandoi, Executive Vice President, ICICI Securities said, “We believe that FedFina has built a strong SMSE lending franchise under the parentage of Federal Bank. We hope that the Company will evolve with this partnership and create a unique value proposition for its customers and stakeholders.” ICICI Securities Limited was the exclusive financial advisor to the Transaction.
