Now Reading: Federal Bank denies stake talks with Jana SFB, stock falls 4.4%
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Federal Bank denies stake talks with Jana SFB, stock falls 4.4%
Federal Bank denies stake talks with Jana SFB, stock falls 4.4%
Federal Bank on Tuesday denied reports that it is in talks to acquire a majority stake in Jana Small Finance Bank, saying in a regulatory filing that while it routinely evaluates growth…
Federal Bank on Tuesday denied reports that it is in talks to acquire a majority stake in Jana Small Finance Bank, saying in a regulatory filing that while it routinely evaluates growth opportunities, there is no material event requiring disclosure. The denial came after a CNBC-TV18 report citing unnamed sources said the two banks were in advanced stages of a deal, with Jana SFB's promoter Jana Holdings Limited (JHL) expected to sell its entire 16.94% stake and Federal Bank likely launching an open offer.
Federal Bank shares fell 4.4% intraday to Rs 342.05 on the NSE before recovering to trade 2.7% lower at Rs 348. Jana SFB shares were trading 1.8% lower at Rs 571.10. The promoter stake sale talk follows a rating downgrade after JHL and Jana Capital defaulted on a Rs 362.5-crore bond repayment, extending the deadline to December 2026. India Ratings downgraded JHL's NCDs from BB to D on 30 June, citing poor liquidity and severe refinancing risk.
Indian Opinion Analysis
JHL's debt pile is estimated at Rs 4,200 crore including interest, against a holding value of just Rs 834 crore, according to India Ratings. The promoter has already sold 4.9% of Jana SFB to TVS Motor for Rs 193 crore and plans to sell another 5.64% to TVS Venu for Rs 317 crore, which would bring TVS's total to 9.99%. Once JHL's stake falls below 9.99%, it plans to apply to Sebi and RBI for de-promoter status. Federal Bank's denial leaves JHL searching for another buyer to meet its looming repayment obligations.
Source: livemint.com
This story was synthesised by AI from the source linked above.
