Fedbank Financial Services Limited has informed the Exchange regarding Intimation of sale of Non-performing small-ticket LAP/Home loans (including technically written off loans).
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Fedbank Financial Services sold a deeply delinquent NPA pool with a gross principal outstanding of Rs. 79.45 crore (including Rs. 41.09 crore technically written off) to India SME Asset Reconstruction Company Limited (ISARC) for an upfront cash payment of Rs. 32.57 crore, recovering about 41% of the principal. The pool consisted of small-ticket Loan Against Property (LAP) loans worth Rs. 55.60 crore and Affordable Home Loans worth Rs. 23.85 crore. After ECL provisions, the net carrying value of the sold pool stood at Rs. 22.20 crore as of August 31, 2025, with an additional Rs. 5.14 crore of accrued interest to be written off in the September 2025 quarter.
This is a positive balance-sheet clean-up exercise that removes deeply stressed loans, brings in upfront cash, and improves overall asset quality metrics. Shareholders should note a small one-time P&L hit of around Rs. 5.14 crore from the interest write-off in Q2 FY26, but the deal should strengthen the company's reported NPA ratios going forward.