Fedbank Financi.

The Company`s presence in large, underpenetrated markets with strong growth potential;

Its "twin engine" business model which ensures growth and risk insulation across economic cycles;

Focus on retail loan products with a collateralized lending model targeting individuals and the emerging MSME sector which is difficult to replicate;

Strong underwriting capability and presence in select customer segment combined with robust risk management capabilities focused on effective underwriting and collections

Experienced, cycle tested management team;

Well diversified funding profile with an advantage of lower cost of funds;

Technology driven company with scalable operating model.

Its may face asset-liability mismatches, which could affect its liquidity and consequently may adversely affect the bank`s operations and profitability.

The company has had negative cash flows in the past and may continue to have negative cash flows in the future.

As on June 30, 2023, 93.65% of its gross AUM was located in Gujarat, Maharashtra, Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, Puducherry and Delhi. Accordingly, our operations are concentrated in six states and two union territories and any adverse developments in these regions could have an adverse effect on its business and results of operations.

Because its handle high volumes of cash and gold jewelry in a dispersed network of branches, the company is exposed to operational risks, including employee negligence, fraud, petty theft, burglary and embezzlement, which could harm its results of operations and financial position.

Its inability to maintain its capital adequacy ratio could adversely affect the company`s business, results of operations and its financial performance.

Its inability to meet its obligations, including financial and other covenants under its debt financing arrangements could adversely affect its business, results of operations and financial condition.

Its business depends on a well-regarded and widely known brand, as well as the brand and reputation of its Promoter, Federal Bank, and the Federal Bank group entities, and any failure to maintain, protect and enhance its brand would harm its business.

Any deterioration in the performance of any pool of receivables securitized and assigned to banks and other institutions may adversely impact its financial performance.

There are pending litigations against the Company and its Promoter. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties and may adversely affect its business, cash flows and reputation.

The company has entered into, and will continue to enter into, related party transactions which may potentially involve conflicts of interest.

Conflicts of interest may arise out of certain common business objectives shared by its Promoter and it.

Its has a huge concentration of loans to emerging self-employed individuals ("ESEI") and micro, small and medium enterprises ("MSME"), and as of June 30, 2023, ESEI and MSME comprise 45.22% and 64.75% of its total loan profiles, respectively. The risk of non-payment or default by its borrowers may adversely affect its business, results of operations and financial condition.

The company is subject to periodic inspection by the Reserve Bank of India. In the past, the RBI has imposed penalties for certain non-compliances with its observations. Non-compliance with the observations of the Reserve Bank of India could adversely affect its business, financial condition, results of operations and cash flows.

As of June 30, 2023, its Gross NPA and Net NPA was Rs. 1,897.71 million and Rs. 1,473.85 million, respectively. Its may be unable to maintain the quality of its loan portfolio or manage the growing loan portfolio which may result in significantly larger non-performing assets and provisions.

Its operate in a highly regulated industry and changes in the laws, rules and regulation applicable to it may adversely affect its business, financial condition and results of operations.

Its funding requirements and the proposed deployment of Net Proceeds have not been appraised by any bank or financial institution or any other independent agency and its management will have broad discretion over the use of the Net Proceeds.

Though its have experienced growth in recent years, the company may not be able to sustain its growth or manage it effectively or execute its growth strategy effectively. Its reviewed the company growth strategy in Fiscal 2022 to reduce its focus on its wholesale finance business. Its may not be able to undertake similar changes in the future successfully or at all.

Its business and operations are dependent on its ability to timely access cost effective sources of funding. Any disruption in its sources of funding could have an adverse effect on the company`s business, results of operations and financial condition.

A significant portion of its business is derived from its gold loan products and the loss of business in relation to such gold loan products could adversely affect its business and prospects.

Any downgrade in its credit ratings could increase its borrowing costs, affect the company`s ability to obtain financing, and adversely affect its business, results of operations and financial condition.

Its affected by volatility in interest rates for both its lending and treasury operations, which could cause the company net interest income and net interest margin to vary and consequently affect our profitability.

Some of its Directors and its Promoter may have interests in entities in businesses similar to ours, which may result in conflicts of interest with it.

Its Promoter is subject to certain ongoing civil, criminal, tax, regulatory and disciplinary proceedings and any adverse outcome in these or other proceedings may lead to reputation risks.

Being a debt listed company, the Company is subject to the continuous disclosure obligations under the SEBI Listing Regulations. Any non-compliance with the SEBI Listing Regulations may subject it to certain actions initiated by the stock exchanges, including, without limitation, the imposition of fines. Further, any breach of the covenants under its debenture trust deeds may subject it to enforcement actions by its debenture trustees.

After the completion of the Offer, its Promoter may be able to exert significant influence over the Company which may limit your ability to influence the outcome of matters submitted for approval of its Shareholders.

Its inability to adequately assess and recover the assessed or full value of gold collateral or amounts outstanding under defaulted gold loans in a timely manner, or at all, could adversely affect its business, results of operations and financial condition.

Its inability to adequately assess and recover the assessed or full value of property collateral or amounts outstanding under defaulted mortgage loans in a timely manner, or at all, could adversely affect its business, results of operations and financial condition.

Any failure or significant weakness of its internal controls, processes or systems could cause operational errors or incidents of fraud, which would adversely affect its business, profitability and reputation.

The Offer Price, market capitalization to total turnover and price to earnings ratio based on the Offer Price of the Company, may not be indicative of the market price of the Company on listing or thereafter. Its Equity Shares have never been publicly traded, and after the Offer, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop.

Its participate in markets that are competitive with continuously evolving customer needs, and if the company does not compete effectively with established companies and new market entrants, its business, results of operations, cash flows and financial condition could be adversely affected.

Its subject to competition with commercial, regional rural and cooperative banks and if the company does not compete effectively with such entities, its business, results of operations, cash flows and financial condition could be adversely affected.

Its financial performance may be materially and adversely affected by an inability to respond promptly and effectively to new technological innovations.

Any inability to expand its business into new regions and markets in India or the sub-optimal performance of its new branches could adversely affect its business, results of operations, financial condition and cash flows.

Its operate in a cyclical industry. With respect to the company mortgage loans, in an economic downturn, its may not be able to grow its business or maintain levels of liquidity, loss minimization, and revenue growth to sustain its business and remain viable through the credit cycle.

Its operate in a cyclical industry. With respect to its mortgage loans, in an economic downturn, the company may not be able to grow its business or maintain levels of liquidity, loss minimization, and revenue growth to sustain its business and remain viable through the credit cycle.

Its relies on third-party vendors, software and information technology solutions, which may not perform satisfactorily.

The resurgence of the COVID-19 pandemic may affect its business and operations in the future.

There may be certain inadvertent discrepancies in its secretarial filings and/ or corporate records. its cannot assure you that no legal proceedings or regulatory actions will be initiated against it in the future in relation to any such discrepancies.

Its may not be able to identify, monitor and manage risks or effectively implement its risk management policies.

Certain statutory and regulatory licenses and approvals are required for conducting its business and any failure or omission to obtain, maintain or renew these licenses and approvals in a timely manner, or at all, could adversely affect its business and results of operations.

Its utilize the services of certain third parties for the company operations and any interruption or deficiency in their services could have an adverse effect on its business.

The company depends on the accuracy and completeness of information provided by its customers and certain third party service providers and its reliance on any erroneous or misleading information may affect its judgement of their creditworthiness, as well as the value of and title to the collateral.

Its relies on its internal credit policy to make credit decisions. If its does not make accurate credit decisions, its business and financial results will be adversely affected, and the impact could be material.

One of its Group Companies, Niva Bupa Health Insurance Company Limited ("Niva Bupa") has been subject to regulatory and statutory actions in the past.

Its depends on its Key Managerial Personnel and Senior Management Personnel, as well as its experienced and capable employees, and any failure to attract, motivate, and retain its employees could adversely affect its business, results of operation and financial condition, or harm its ability to maintain and grow its business.

Its non-convertible debentures ("NCDs") are listed on BSE and the company is subject to rules and regulations with respect to such listed NCDs. If its fail to comply with such rules and regulations, its may be subject to certain penal actions, which may have an adverse effect on its business, results of operations, financial condition and cash flows. Further, the trading in its NCDs has been and may continue to be limited or sporadic, which may affect its ability to raise debt financing in the future.

The company is exposed to risks that may arise if its customers opt for balance transfers to other banks or financial institutions, or if customers face increased difficulties in refinancing their existing loans from other banks and financial institutions to the Company.

Its conduct its business operations on leased premises, including the company Registered and Corporate Office, and its inability to renew such leases may adversely affect its operations.

Its insurance coverage may not be sufficient or may not adequately protect it against all material hazards, which may adversely affect its business, results of operations and financial condition.

Fluctuations in the market values of its investments could adversely affect the company result of operations and financial condition.

The bankruptcy code in India may affect its rights to recover loans from its customers.

A portion of its loans are unsecured. If borrowers under unsecured loans default and its unable to recover such receivables in a timely manner or at all, its financial condition, results of operations and cash flows may be adversely affected.

Its Promoter, Key Managerial Personnel, Senior Management Personnel and Directors have interests in it other than the reimbursement of expenses incurred and normal remuneration and benefits.

Its Promoter, Key Managerial Personnel, Senior Management Personnel and Directors have interests in it other than the reimbursement of expenses incurred and normal remuneration and benefits.

Regulatory or legislative developments regarding privacy and data security matters could adversely affect its ability to conduct the company business.

Its may be unable to sufficiently obtain, maintain, protect, or enforce its intellectual property and other proprietary rights.

Any failure by it to comply with applicable anti-money laundering, counter-terrorist financing and economic sanction laws and regulations could lead to penalties and may damage its reputation.

The company has certain contingent liabilities, which, if materialized, may adversely affect its financial condition, cash flows and results of operations.

Its operations could be adversely affected by strikes or increased wage demands by its employees or any other kind of disputes with its employees.

Certain sections of this Red Herring Prospectus contain information from the report titled analysis of NBFC sector and select asset classes in India` dated October 2023, ("CRISIL Report") which has been commissioned and paid for by it exclusively for the purpose of the Offer. The CRISIL Report, prepared and issued by CRISIL MI&A, a division of CRISIL, is not exhaustive and is based on certain assumptions and parameters / conditions and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

Its has presented certain supplemental information of the company performance and liquidity which is not prepared under or required under the Indian Accounting Standards notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS").

Its Statutory Auditors have included a matter of emphasis in their audit report on financial statements as at and for the year ended Fiscals 2021.