- **Fedbank Financial Services - Fedfina - is a retail lender that puts gold jewellery and property on the line, not a borrower’s paperwork, to serve India’s small-business owners and self-employed who rarely fit the tidy boxes of a bank loan application. It began in 2007 as a distribution arm selling its parent Federal Bank’s home and car loans, got its own NBFC licence in 2010, and then built its own book one collateral-backed product at a time - gold loans in 2011, mid-sized property loans in 2015, and small-ticket mortgages in 2018 - before making a defining call in FY25 to discontinue new originations from unsecured business loans from Dec’24 and move towards a fully secured lending portfolio. The recurring idea is a “twin-engine” approach: two secured loan books that behave differently across economic cycles, so when one slows down the other tends to pick up, giving the company a built-in hedge.** # Business segments Two secured lending engines - gold loans and loans against property - that together form a near-fully collateralised book, with a small distribution sideline inherited from the company’s origins. ## 1. Gold loans: the fast, counter-cyclical engine **A high-velocity book backed by physical gold jewellery that turns a household asset into working capital within minutes, and tends to thrive when the economy slows.** - **Short-tenor, self-liquidating book** - gold loans carry a “jumping interest rate” where customers either pay interest monthly or settle a lump sum at maturity, and the average loan is small enough (₹2.7 lakh) that the portfolio churns quickly, giving the company room to reprice assets faster than its liabilities mature. - **Collateral buffer built in** - loans are written at 70% of the gold’s value at origination, and the portfolio-level loan-to-value sits at 60.9%, meaning gold prices would need to fall sharply before the company faces a loss; if the ratio nears 88%, a margin call gives the customer 15 days to top up before auction. - **Tonnage is the scorecard** - branch staff have incentives tied to the weight of gold booked, not just loan value, which aligns the field force with the real collateral base; the book crossed 12.6 tonnes and ₹10,352 crores in FY26, up from 9.5 tonnes two years earlier. ## 2. Mortgage loans: the long-tenor, growth-cycle engine **Property-backed loans to small traders, manufacturers and self-employed professionals who can pledge a shop, home or office but cannot always document their income the way a bank demands.** - **Two ticket sizes, two risk profiles** - medium-ticket LAP (average ₹72.4 lakh) is a low-risk, entirely variable-rate book written at 52.9% LTV and concentrated in a dozen metro and tier-1 cities; small-ticket LAP and housing loans (average ₹16.1 lakh) carry higher yields, use a mix of fixed and floating rates, and reach deeper into the MSME base. - **Underwriting what the tax return misses** - for loans under ₹25 lakh, the company uses an “assessed income” method that combines declared income with a derived-income estimate, because self-employed borrowers often under-report profit; above ₹25 lakh, formal documentation takes over. - **Property the company can actually sell** - 82.2% of the mortgage book is secured by self-occupied residential or commercial property, and the company sold a pool of deeply delinquent small-ticket loans to an asset reconstruction company in FY25 for 41% of principal, cleaning the book while recovering cash upfront. ## 3. Distribution: the legacy sideline **A small fee-based business that traces back to the company’s origins as a distributor of its parent bank’s financial products.** - **Insurance distribution licence** - Fedfina obtained a Corporate Agent licence from the insurance regulator in mid-2024, allowing it to solicit life, general and health policies, which adds a non-lending fee stream without taking credit risk. - **Ancillary to the main engines** - the distribution segment contributes roughly 1% of revenue and exists alongside the two lending books rather than as a standalone growth driver (segment mix context). # Group structure and partners **A bank-promoted NBFC with a public listing, a private-equity partner, and a balance sheet that leans on its parent’s brand and banking relationships.** - **Federal Bank is the majority owner** - the parent held 60.8% as of March 2026, making Fedfina one of the few listed NBFCs promoted by a listed private bank in India. - **True North brought strategic capital** - the Mumbai-based private-equity firm invested ₹1,686 million in FY18-FY19 and held 8.8% post-IPO, with a board seat reserved under the shareholders’ agreement. - **Public since late 2023** - the ₹10.9 billion IPO (primary plus secondary) was oversubscribed 2.2 times, and the stock trades on the NSE and BSE. - **No subsidiaries, no joint ventures** - the entire business operates as a single entity, keeping the structure simple.