Fedbank Financial Services Receives ICRA AA+ Rating for Subordinated Debt Program

Fedbank Financial Services Limited has secured favorable credit ratings from ICRA Limited, reflecting the company's strong financial position and strategic focus on secured lending products. The rating agency announced significant updates to the company's credit facilities on March 16, 2026.

Credit Rating Updates

ICRA Limited has taken comprehensive rating actions for Fedbank Financial Services' debt instruments:

Instrument:	Amount (Rs. crore):	Previous Rating:	Current Rating:
Subordinated Debt:	750	-	[ICRA]AA+ (Stable); assigned
Commercial Paper:	2,500	[ICRA]A1+	[ICRA]A1+; reaffirmed and assigned for enhanced amount of Rs. 500 crores
Total Facilities:	3,250	2,000

The subordinated debt program represents a new facility with an assigned rating of [ICRA]AA+ (Stable), while the commercial paper program saw its facility enhanced from Rs. 2,000 crore to Rs. 2,500 crore with rating reaffirmation.

Strong Parentage and Capital Position

The ratings factor in Fedbank Financial Services' robust parentage, with Federal Bank Limited maintaining a 60.8% stake as of December 2025. This relationship provides the company with managerial, operational, and financial support when required. Federal Bank's Managing Director & Chief Executive Officer and Executive Director serve on the company's board, demonstrating strong governance linkages.

The company maintains a comfortable capitalisation profile with key metrics as of December 2025:

Parameter:	Value:
Gearing:	4.0 times
CRAR:	20.5%
Outstanding Debt from FBL:	Rs. 1,175.8 crore
FBL's Share of Total Borrowings:	10%

Business Focus and Asset Quality

Fedbank Financial Services has strategically repositioned its business model toward secured lending products. The company's assets under management increased at a compound annual growth rate of 37% from March 2022 to March 2025, reaching Rs. 17,500 crore as of December 2025.

Key loan products include:

Gold loans: 45% of AUM as of December 2025
Medium-ticket loan against property (MT-LAP): Average ticket size of Rs. 0.65 crore
Small-ticket LAP (ST-LAP): Average ticket size of Rs. 0.15 crore
Home loans

The company has undertaken significant portfolio restructuring, including a 100% assignment and derecognition of its unsecured business loan book worth Rs. 976 crore in 9M FY2026 due to stress in this segment.

Financial Performance and Outlook

ICRA noted that the company's profitability was impacted in FY2025 due to elevated credit costs, with return on average managed assets (RoMA) declining to 1.5% from 2.1% in FY2024. However, performance showed improvement in 9M FY2026:

Metric:	FY2024:	FY2025:	9M FY2026:
Total Income (Rs. crore):	1,623	2,080	1,610
Profit After Tax (Rs. crore):	245	225	243
Return on Managed Assets:	2.1%	1.5%	1.8%
Credit Costs:	0.6%	1.4%	0.6%

The company's liquidity position remains strong with on-balance sheet liquidity of approximately Rs. 1,067 crore and sanctioned but unavailed bank lines of about Rs. 1,937 crore as of January 31, 2026. The presence of short-term assets, primarily gold loans, further supports the liquidity profile.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.27%	+2.81%	+5.54%	-11.28%	+57.83%	-3.11%

Fedbank Financial Services Limited has clarified to stock exchanges that the requirements under SEBI's recent circular regarding special windows for physical share transfer and dematerialisation are not applicable to the company. The clarification was made through a communication dated March 16, 2026, addressed to both BSE Limited and National Stock Exchange of India Limited.

Current Shareholding Structure

The company informed exchanges that its entire equity shareholding is presently held in dematerialised form, with a single exception. Only one shareholder currently holds physical shares after specifically requesting rematerialisation from DEMAT mode to physical form.

Parameter:	Details
Total Physical Shares:	5 shares
Number of Physical Shareholders:	1 shareholder
Shareholding Mode:	Rematerialised from DEMAT
Remaining Shareholding:	100% dematerialised

SEBI Circular Requirements

Pursuant to SEBI Circular Ref. No. HO/38/13/11(2)2026-MIRSD-POD/I/3750/2026 dated January 30, 2026, companies are required to open special windows for transfer and dematerialisation of physical shares. However, the company clarified that these requirements apply only where physical shareholders exist to whom the dematerialisation and transfer window is applicable.

Listing and Historical Context

Fedbank Financial Services was listed on BSE Limited and National Stock Exchange of India Limited on November 30, 2023, with 100% DEMAT shareholding at the time of listing. The company noted that no share transfer requests were lodged prior to 2019, which further supports its position regarding the non-applicability of the SEBI circular requirements.

Regulatory Compliance

Based on the current shareholding structure and historical transfer activity, the company has determined that the newspaper publication and reporting requirements prescribed under the SEBI circular are not applicable. The clarification was signed by Parthasarathy Iyengar, Company Secretary and Compliance Officer, and submitted to both exchanges for information and record purposes.

This regulatory clarification demonstrates the company's proactive approach to compliance and transparency in communicating with stock exchanges regarding applicable regulatory requirements.