Fedbank Financial Services Ltd. Receives Investment from True North


Mumbai: The Board of Directors of Federal Bank has approved 26 per cent strategic investment by private equity player True North in its wholly owned subsidiary – FedBank Financial Services Limited (FedFina).

The investment will help FedFina augment its capital base primarily to support its growing asset business and to grow its branch network. The funding is expected to help further improve the company’s financial fundamentals by strengthening its capital adequacy and diversifying its funding sources.

“We are happy to welcome True North on-board.  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,” Shyam Srinivasan, MD & CEO, Federal Bank said.0

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.

FedFina was promoted and wholly owned by Federal Bank, one of the leading private sector banks in India. Company categorized as a NBFC has been engaging 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/investment needs.

FedFina is having presence across 43 locations through its branches/ROs and currently operate in 8 states. Company had a loan book of INR 1,413.11 Cr as at March 2018 which has grown at 46.9% from FY17.

True North (formerly known as India Value Fund Advisors – IVFA) was established in 1999 with a focus on investing in and transforming mid-sized profitable businesses into world-class industry leaders, built on the strong foundation of True North Values which are embodied within the principles of ‘The Right Way’. True North has built deep knowledge and skills in the Indian markets and has successfully launched five separate investment funds with a combined corpus of over US$ 2 billion. True North’s insights and understanding of India has been sharpened over the last 17 years by investing over US$ 1 billion in more than 30 Indian businesses. It has successfully guided these companies in making the transition into well-established and large businesses that are valuable, enduring and socially responsible.

The True North team has been structured with a balanced mix of 9 Investment and 16 Business Managers, who bring with them several hundred man-years of industry experience to achieve the above objective.