1 week ago
Federal Bank Denies Majority Stake Deal With Jana SFB
Federal Bank was reported to be planning to buy a large part of Jana Small Finance Bank.
Federal Bank said this report was not a deal it could confirm.
The report caused Federal Bank’s share price to fall during Tuesday trading.
Jana Holdings owns part of Jana Small Finance Bank and has major debt payments to make.
Its debt was downgraded after a bond repayment default.
Jana Holdings has been selling shares in the small finance bank to raise money.
TVS Motor and TVS Venu are among the buyers mentioned in the reports.
The two companies involved have not announced a majority acquisition by Federal Bank.
Federal Bank denied reports that it is negotiating to acquire a majority stake in Jana Small Finance Bank.
A CNBC-TV18 report had said the banks were in advanced deal discussions and that Jana Holdings would sell its 16.94% stake.
Federal Bank shares fell as much as 4.4% to ₹342.05 on the NSE before recovering some losses.
Jana Holdings and Jana Capital face roughly ₹4,200 crore in repayments after a ₹362.5-crore bond default.
Jana Holdings has been selling Jana Small Finance Bank shares, including stakes bought by TVS Motor and TVS Group investor TVS Venu.
- Who
- Federal Bank, Jana Small Finance Bank, Jana Holdings and Jana Capital are central to the report; CNBC-TV18 reported the alleged deal.
- What
- Federal Bank denied reports that it is in talks to acquire a majority stake in Jana Small Finance Bank.
- Where
- The companies’ shares traded on the National Stock Exchange of India.
- When
- The denial and market reaction occurred on Tuesday; the articles also cite events through 16 July and 30 June.
- Why
- The reported stake sale was linked to Jana Holdings’ need to meet substantial debt obligations, although Federal Bank denied that a material deal required disclosure.
Reported Acquisition
Federal Bank Denial
Whether negotiations are advanced
Reported Acquisition
A CNBC-TV18 report citing people familiar with the matter said Federal Bank and Jana Small Finance Bank were in advanced stages of a majority-stake transaction.
Federal Bank Denial
Federal Bank said it evaluates opportunities in the ordinary course but stated that there was no material event or information requiring disclosure.
Jana Holdings stake sale
Reported Acquisition
The report said Jana Holdings was expected to sell its entire 16.94% stake, potentially followed by an open offer from Federal Bank.
Federal Bank Denial
Federal Bank did not confirm any acquisition, stake purchase or open offer.
Reason for possible sale
Reported Acquisition
The reported transaction was consistent with Jana Holdings’ need to raise funds for debt repayments after a bond default and rating downgrade.
Federal Bank Denial
The denial means the reported debt-related stake sale should not be treated as a confirmed Federal Bank transaction.
Key facts
- Federal Bank position
- The bank said it routinely evaluates growth opportunities but had no material event or information requiring disclosure.
- Reported transaction
- CNBC-TV18 reported that Federal Bank and Jana Small Finance Bank were in advanced stages of a majority-stake deal.
- Promoter stake
- Jana Holdings was reported to hold a 16.94% stake in Jana Small Finance Bank and was expected to sell its entire holding.
- Federal Bank share movement
- Shares fell 4.4% intraday to ₹342.05 before trading 2.7% lower at ₹348 at 2:30 p.m. IST.
- Bond default
- Jana Holdings and Jana Capital defaulted on non-convertible debentures after extending repayment deadlines to 31 December 2026.
- Debt exposure
- Jana Holdings and Jana Capital collectively faced repayments of about ₹4,200 crore, including interest, as of 30 June.
- TVS transactions
- Jana Holdings sold a 4.9% Jana Small Finance Bank stake to TVS Motor for ₹193 crore, while TVS Venu planned to acquire an additional 5.64% stake for ₹317 crore.
Quotes
India Ratings
Credit-rating agency assessing Jana’s promoter holding companies
“The debt raised by both the holding companies are in the form of zero-coupon bonds, which is leading to lumpy payouts on maturity. Ind-Ra estimates the value of the holding is ₹833.53 crore, which is significantly short of the amount due for the NCD repayment”
livemint.com
“The bank evaluates various opportunities in the ordinary course, for growth and expansion of its business. Further, we clarify that there is no material event/ information that requires disclosure,”
livemint.com
Sources
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