Tag: IFC

Fino Payments Bank shares list with nearly 6 pc discount, BFSI News, ET BFSI

Banking & Finance

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New Delhi, Shares of Fino Payments Bank Ltd made a tepid market debut on Friday, listing with a discount of nearly 6 per cent from its issue price of Rs 577. The stock made its debut at Rs 548, a decline of 5 per cent from the issue price on the BSE. It later dipped 7.15 per cent to Rs 535.70.

At the NSE, it listed at Rs 544.35, lower by 5.65 per cent.

The Rs 1,200.3-crore IPO had a price range of Rs 560-577 per share for the offer.

Fino Payments Bank or FPBL is a scheduled commercial bank serving the emerging Indian market with its digital-based financial services.

The company is a fully-owned subsidiary of Fino Paytech, a pioneer in technology-enabled financial inclusion solutions.

Fino Paytech is backed by investors like Blackstone, ICICI Group, Bharat Petroleum and International Finance Corporation (IFC).



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IFC invests ₹916 crore in Federal Bank for 4.99% stake

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IFC, along with two investment funds managed by IFC Asset Management Company (IFC Financial Institutions Growth Fund and IFC Emerging Asia Fund) have picked up 4.99 per cent stake in Federal Bank for ₹916 crore.

“Increased financing for climate friendly projects as well as more financing for small businesses to help accelerate India’s economic recovery from Covid-19 are expected in the wake of a $126 million (₹916 crore) equity investment in Federal Bank,” the private sector lender said in a statement on Thursday.

The investment will also support Federal Bank’s commitment to environmental social and governance (ESG) standards, and also strengthen its Tier 1 capital adequacy ratio (CAR) and expand its micro, small and medium sized enterprises (MSME) and climate finance portfolios, it further said.

“After the bank’s board approved issuance of shares to the IFC group to an extent of 4.99 percent of the bank’s paid-up capital, IFC has become a significant shareholder of the bank,” said Shyam Srinivasan, Managing Director and CEO, Federal Bank.

The investment also marks IFC’s first in India aligned to the Greening Equity Approach, which will enable the Federal Bank to reduce its exposure to coal and increase its climate lending.

Roshika Singh, Acting Country Manager for IFC in India said the move is in line with IFC’s strategy to support green growth and will also help create jobs.

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IFC’s investment in Federal Bank to promote green recovery, improve access to finance for SMBs, BFSI News, ET BFSI

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IFC and two investment funds managed by IFC Asset Management Company, IFC Financial Institutions Growth Fund, LP, and IFC Emerging Asia Fund, LP have made an equity investment for a 4.99 percent stake in Federal Bank Limited.

The $126 million (₹916 crores) equity investment is expected to increase financing for climate-friendly projects as well as more financing for small businesses to help accelerate India’s economic recovery from COVID-19.

The investment is expected to support FBL’s commitment to environmental, social, and governance standards with increased green portfolio financing for projects including energy efficiency, renewable energy, climate-smart agriculture, green buildings, and waste management.

The investment also aims to strengthen its Tier 1 capital adequacy ratio (CAR) and expanding its micro, small, and medium-sized enterprises (MSME) and climate finance portfolios – key for growth opportunities as the country recover from the pandemic.

Shyam Srinivasan, MD & CEO of Federal Bank said, “After the Bank’s board approved the issuance of shares to the IFC group to an extent of 4.99 percent of the bank’s paid-up capital, IFC has become a significant shareholder of the bank. The addition of this marquee name to the list of our prominent shareholders reinforces the trust and confidence reposed by the IFC group in the bank and its management. The infusion of quality capital further strengthens Tier 1 and overall CAR of the bank.”

IFC will also consult with the bank on developing a new Environmental and Social Management System (ESMS) that will be applied to its entire portfolio. IFC will also implement an E&S technical advisory program.

Roshika Singh, Acting Country Manager for IFC in India, said, “This move is in line with IFC’s strategy to support green growth by spurring investments to build back better and greener, seizing the opportunities to help India meet its climate goals and build a greener, resilient future.”

Additionally, India’s MSMEs have faced increasing difficulty gaining access to the financing they need. Around 63 million MSMEs typically contribute nearly 30 percent to GDP, but about 11 million MSMEs remain fully or partially excluded from India’s formal financial system with an estimated financing gap of around $400 billion. The COVID-19 pandemic has further hampered the availability of funding for MSMEs.

India ranks third globally in terms of greenhouse gas (GHG) emissions, with the country needing substantial investments to meet its goals under the Paris Agreement to reduce GHG emissions by 2030. IFC estimates a total climate-smart investment opportunity of $3 trillion in India by the year 2030.



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Federal Bank board clears IFC’s Rs 916 crore investment, BFSI News, ET BFSI

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Mumbai: The International Finance Corporation (IFC) Group has invested Rs 916 crore in Federal Bank. In a notice to the stock exchange, the Kerala-based bank said that the board approved the decision in its meeting on July 23.

The board approved the allotment of 10.5 crore shares of face value Rs 2 to the IFC Group at an issue price of Rs 87.4. With this allotment, the paid-up capital of the bank has risen from 199.6 crore shares to 210.1 crore of Rs 2 each. The bank said in a statement that the decision by IFC to acquire 4.9% in the bank was a testimony to its belief in the brand and its operational efficiency.

As of end June 2021, mutual funds held 35.6% in the bank followed by foreign investors (24%) and insurance companies (10.8%). Individual shareholders and others held the remaining 29.3%. The investment from IFC comes at a time when the bank’s CEO Shyam Srinivasan received RBI’s approval for a three-year extension.

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Federal Bank Q1 profit down 8.4%

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Private sector lender Federal Bank reported an 8.4 per cent drop in net profit for the quarter ended June 30, 2021 at ₹367.29 crore. Its net profit was ₹400.77 crore in the first quarter of last fiscal.

The bank’s total income grew by 1.9 per cent to ₹4,005.86 crore in the April- June 2021 quarter from ₹3,932.52 crore a year ago.

Net interest income grew by 9.4 per cent to ₹1,418.43 crore in the first quarter this fiscal against ₹1,296.44 crore a year ago.

Other income surged by 33.1 per cent to ₹650.15 crore for the quarter under review.

Provisions increased by 62.6 per cent to ₹641.83 crore in the first quarter this fiscal as against ₹394.62 crore a year ago.

Gross non performing assets also rose to ₹4,649.33 crore or 3.5 per cent of gross advances as on June 30, 2021 versus 2.96 per cent a year ago. Net NPA levels were stable at 1.23 per cent at the end of the first quarter this fiscal versus 1.22 per cent as on June 30, 2020.

Federal Bank said 13 borrower accounts involving ₹600.67 crore were given modifications under the Resolution Framework 2.0.

In a separate stock exchange filing, Federal Bank said its board of directors at the meeting on Friday also approved allotment of 10.48 crore equity shares at the issue price of ₹87.39 per share to International Finance Corporation, IFC Financial Institutions Growth Fund and IFC Emerging Asia Fund.

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