Federal Bank falls 4% on report of Jana Small Finance Bank stake acquisition

Kolkata: Share price of Federal Bank fell nearly 4% intra-day following a media report that the private sector lender is likely to acquire a controlling stake in Jana Small Finance Bank.

Jana Bank's shares was also seen being traded 3% lower.

According to the report, Federal Bank is in talks with the small finance bank's promoter Jana Holdings to acquire its 16.9% stake. This would be followed with an open offer.


Federal Bank's market capitalisation is hovering around Rs 85580 crore Tuesday while Jana SFB's market capitalisation is Rs 6040 crore. Jana Holdings is not publicly listed.

ET has written to both Federal Bank and Jana Small Finance Bank for comments on the matter. Their responses are awaited.

Jana Holdings has been looking for exit options for some time now while it was initially looking to bring down the holding below 10% by December this year as it needed funds immediately to pay back its bond holders, people aware said.

If the Federal Bank deal materialises, it would help Jana Holdings to meet its payment obligations to bond holders such as TPG Asia. The payments were earlier due on June 30 but the holding company could not service it.

Jana Holdings (JHL) is a wholly owned subsidiary of Jana Capital (JCL). Both JHL and JCL in the last week of June received approvals from the Bombay stock Exchange (BSE) for a cumulative Rs 1663-crore debt restructuring and extension of the payment deadline to bondholders to December 31, 2026.

Jana Holdings had said during that time that it would pay back the bond holders by selling its stake in the bank.

Jana Holdings had 21.85% ownership in Jana Bank at the end of March 31, 2026. It sold 4.9% to TVS Motor a month ago for Rs 193 crore. It was also looking for a few more strategic buyers but the deal could not take place, resulting in a payment default to bond holders, people familiar with the matter said.