Fedbank Financial Services ranked third in disbursement growth among its peers, with a three-year CAGR of 35% from 2020 to 2023.
With high ratings, CARE gave the company an AA rating for its non-convertible debentures (NCDs) in 2022, while India Ratings and Research Private Limited conferred an AA rating for both NCDs and bank loans in 2018.
In 2023, the top five states accounted for 78.72% of the company’s total assets under management, with the leading three states contributing 54.59% to the AUM.
As of March 31, 2023, 304 branches have operated for over three years, while 271 have operated for less than three years.
Fedbank Financial Services targets the emerging MSME sector and ESEI consumers, with 85.98% of loan assets secured against tangible assets like gold or property.
Actively monitoring its loan portfolio, Fedbank Financial Services builds a priority sector lending portfolio, allowing for securitization transactions with banks. As of March 31, 2023, the securitized portfolio totaled Rs. 1092.6 crore across leading public and private sector banks.
As of March 31, 2023, cash and cash equivalents and other bank balances amounted to Rs. 94.62 crore.
In 2023, 2022, and 2021, Fedbank Financial Services invested Rs. 25.12 crore in information technology and digital systems.
Fedbank Financial Services relies significantly on the assets under management generated by its gold loan products. The potential loss of business related to these gold loan products poses a risk that could negatively impact the company's overall business and future prospects.
A substantial concentration of loans towards emerging self-employed individuals (ESEI) and micro, small, and medium enterprises (MSME) poses the risk of non-payment or default, which could adversely affect the company's financial condition, operational results, and overall business.
As of March 31, 2023, Fedbank Financial Services’ total borrowings amounted to Rs. 7135.8 crore.
As of March 31, 2023, the company's operations are primarily concentrated in two states in western India, four states, and one union territory in southern India, and one union territory in northern India. Any unfavorable developments in these regions have the potential to adversely affect the company's business and operational results.
The company's ability to maintain its capital adequacy ratio is crucial. A failure to do so could adversely affect its business, operational results, and overall financial performance.
Fedbank Financial Services and its promoter are currently facing pending litigation. Unfavorable decisions in these legal proceedings may expose the company and its promoter to liabilities and penalties, potentially harming the company's business, cash flows, and reputation.
Fedbank Financial Services has experienced negative cash flows in the past, and continued negative cash flows are possible.
Additionally, Fedbank Financial Services has certain contingent liabilities that, if realized, could adversely affect its financial condition, cash flows, and operational results.