Fedbank Financial Services IPO Basis of Allotment

^A DISCOUNT OF?10 PER EQUITY SHARE WAS OFFERED TO ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION PORTION.

Weighted average cost of acquisition of all shares transacted in three years, eighteen months and one year immediately preceding the Prospectus.

*As certified by M/s R U Kamath & Co by way of their certificate dated November 21, 2023

Business Risk

1. Though we have experienced growth in recent years, we may not be able to sustain our growth or manage it effectively or execute our growth strategy effectively. The following table sets forth our total revenue, profit after tax, asset under management ("AUM"), number of branches and their respective year-on-year growths for the periods indicated:

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

3. Our business and operations are dependent on our ability to timely access cost effective sources of funding. Disruption in our sources of funding could have an adverse effect on our business, results of operations and financial condition.

4. We may face asset-liability mismatches, which could affect our liquidity and consequently may adversely affect our operations and profitability.

5. A significant portion of our business is derived from our gold. As we handle high volumes of cash and gold jewelry in a dispersed network of branches, we are exposed to operational risks, including employee negligence, fraud, petty theft, burglary and embezzlement, which could harm our results of operations and financial position.

6. Our 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 our business, results of operations and financial condition.

7. We may be unable to maintain the quality of our loan portfolio or manage the growing loan portfolio which may result in significantly larger non-performing assets and provisions

8. Conflicts of interest may arise out of certain common business objectives shared by our Promoter and us.

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

Concentration Risk:

10. We have 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 our total loan profiles, respectively. The risk of non-payment or default by our borrowers may adversely affect our business, results of operations and financial condition.

11. As on June 30,2023,93.65% of our 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 our business and results of operations.

Finance Risk:

12. Our inability to maintain our capital adequacy ratio could adversely affect our business, results of operations and our financial performance. As per the NBFC Scale Based Directions, we are required to maintain CRAR of not less than 15.00% of aggregate risk weighted assets on-balance sheet and of risk adjusted value of off-balance sheet items. As of June 30,2023, our CRAR was 19.71%.

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

14. We have had negative cash flows in the past and may continue to have negative cash flows in the future.

Regulatory and Litigation

15. We are subject to periodic inspections by The Reserve Bank of India ("RBI"). In the past, the RBI has imposed penalties for certain non-compliances with its observations. Non-compliance with the observations of the RBI could adversely affect our business, financial condition, results of operations and cash flows.

16. We operate in a highly regulated industry, and we have to adhere to various laws, rules and regulations. Accordingly, legal and regulatory risks are inherent and substantial in our business. Any changes in the laws, rules and regulation applicable to us may adversely affect our business, financial condition and results of operations.

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

18. The Company will not receive any proceeds from the Offer for Sale.

19. We are subject to competition with commercial, regional rural and cooperative banks and if we do not compete effectively with such entities, our business, results of operations, cash flows and financial condition could be adversely affected.

20. Weighted average cost of acquisition compared to Floor Price and Cap Price:

21. Weighted Average Return on Net Worth for Fiscals 2023,2022 & 2021 is 10.87%

22. Average cost of acquisition of Equity Shares for the Selling Shareholders namely, The Federal Bank Limited is ? 19.45 and True North Fund VI LLP is 146.27 and Offer Price at upper price Band is?140.00

23. The Offer Price, market capitalization to total turnover and price to earnings ratio

The Offer was made through the Book Building Process, in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules. 1957, as amended ("SCRR") read with Regulation 31 of the SEBI ICDR Regulations and in compliance with Regulation 6(1) of the SEBI ICDR Regulations, wherein not more than 50% of the Net Offer was made available for allocation on a proportionate basis to Qualified Institutional Buyers ("QIBs") ('QIB Portion'), provided that our Company and the Selling Shareholders, in consultation with the BRLMs, allocated 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations ("Anchor Investor Portion"), of which one-third was reserved for domestic Mutual Funds, subject to valid Bids having been received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription, or non-allocation in the Anchor Investor Portion, the balance Equity Shares could have been added to the Net QIB Portion. Further, 5% of the Net QIB Portion (excluding the Anchor Investor Portion) was made available for allocation on a proportionate basis only to Mutual Funds, and the remainder of the Net QIB Portion was made available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids having been received at or above the Offer Price. However, if the aggregate demand from Mutual Funds was less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion could have been added to the remaining QIB Portion for proportionate allocation to QIBs. Further, not less than 15% of the Net Offer was made available for allocation to Non-lnstitutional Bidders of which (a) one-third was reserved for applicants with application size of more than *200,000 and up to *1.000,000: and (b) two-third was reserved for applicants with application size of more than *1.000,000. provided that the unsubscribed portion in either of such sub-categories could have been allocated to applicants in the other sub-category of Non-lnstitutional Bidders and not less than 35% of the Net Offer was made available for allocation to Retail Individual Bidders ("RIBs") in accordance with the SEBI ICDR Regulations, subject to valid Bids having been received at or above the Offer Price. Further, Equity Shares will be allocated on a proportionate basis to Eligible Employees applying under the Employee Reservation Portion, subject to valid Bids received from them at or above the Offer Price. All potential Bidders (except Anchor Investors) were required to mandatorily utilise the Application Supported by Blocked Amount ("ASBA") process providing details of their respective ASBA accounts, and UPI ID in case of UPI Bidders (defined hereinafter), in which the corresponding Bid Amounts was blocked by the SCSBs to participate in the Offer. Anchor Investors were not permitted to participate in the Offer through the ASBA process. Further, Equity Shares was allocated on a proportionate basis to Eligible Employees applying under the Employee Reservation Portion, subject to valid Bids received from them at or above the Offer Price. For details, see 'Offer Procedure' on page 465 of the Prospectus.

The bidding for Anchor Investor opened and closed on Tuesday. November 21.2023. The company received 22 applications from 21 Anchor Investors for 24,648,092 equity shares. The Anchor investor price was finalized at Rs. 140/- per Equity Share. A total of 6,642,881 shares were allocated under the Anchor Investor Portion aggregating to Rs. 3,246,792,360.00

The Offer received 3,61,305 applications for 14,80,38,673 Equity Shares (prior to rejections) resulting in 1.8961 times subscription. The details of the applications received in the Offer from various categories are as under: (before rejections):

Final Demand

A summary of the final demand as per BSE and NSE as on the Bid/Offer Closing Date as at different Bid prices is as under:

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being NSE on November 28.2023.

A. Allotment to Retail Individual Bidders (after rejections) (including ASBA Applications)

The Basis of Allotment to the Retail Individual Bidders, who have bid at the Cut-Off Price or at the Offer Price of Rs. 140 per Equity Share, was finalized in consultation with the NSE. This category has been subscribed to the extent of 1.7893 times. The total number of Equity Shares Allotted in Retail Portion is 2,71,97,375 Equity Shares to 2,54,181 successful Retail Individual Bidders. The category-wise details of the Basis of Allotment are as under:

Including Spillover of 1.40.772 Equity Shares from Eligible Employee category

B. Allotment to Non-lnstitutional Bidders (more than 70.2 million and up to 71.00 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Bidders (more than Rs. 0.2 million and up to Rs. 1.00 million), who have bid at the Offer Price of Rs. 140 per Equity Share, was finalized in consultation with NSE. This category has been subscribed to the extent of 1.9064 times. The total number of Equity Shares allotted in this category is 38.85,339 Equity Shares to 2.593 successful applicants. The category-wise details of the Basis of Allotment are asunder: (Sample)

Includes spillover of 20,110 Equity Shares from Eligible Employee Category.

C. Allotment to Non-lnstitutional Bidders (more than Rs. 1.00 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Bidders (more than Rs. 1.00 million), who have bid at the Offer Price of Rs. 140 per Equity Share, was finalized in consultation with NSE. This category has been subscribed to the extent of 1.0698 times. The total number of Equity Shares allotted in this category is 77,70,679 Equity Shares to 1,037 successful applicants. The category-wise details of the Basis of Allotment are as under: (Sample)

Includes spillover of 40,221 Equity Shares from Employee Category.

D. Allotment to Employee Reservation (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Eligible Employee Portion, who have bid at the Offer Price net of Employee Discount, i.e. Rs. 130 per Equity Share was finalized in consultation with NSE. This category has been subscribed to the extent of 0.4369 times. The total number of Equity Shares allotted in this category is 3,36,087 Equity Shares to 855 successful applicants. The category-wise details of the Basis of Allotment are as under:

The Employee Reservation was for Rs.100 million as mentioned in the Prospectus representing 769,230 Equity Shares at the price off 130 per Equity Share net of Employee Discount. The Unsubscribed portion of 756.31 million representing around 4,33,143 Equity Shares as 7130 per Equity Share, translating to around 4,02,204 Equity shares at the Offer Price of 7140 per Equity Share has been spilled over to QIB Portion. Non-lnstitutional Portion and Retail Portion in the ratio of 50:15:35 The balance 30,939 Equity Shares cannot be allocated to any category, since the Fresh Offer is aggregating to Rs. 6,000 million.

E. Allotment to QIBs

Allotment to QIBs, who have Bid at the Offer Price of ?140 per Equity Share, has been done on a proportionate basis in consultation with the NSE. This category has been subscribed to the extent of 3.4269 times of QIB Portion. As per the SEBI Regulations, Mutual Funds were Allotted 5% of the Equity Shares of QIB Portion available i.e.. 7,83,102 Equity Shares and other QIBs and unsatisfied demand of Mutual Funds were Allotted the remaining available Equity Shares i.e., 1,48,78,915 Equity Shares on a proportionate basis. The total number of Equity Shares Allotted in the QIB Portion is 1,56,62,017 Equity Shares, which were allotted to 18 successful QIB Bidders. The category-wise details of the Basis of Allotment are as under:

Includes spilled over of 2,01,101 Equity Shares from Employee Category.

F. Allotment to Anchor Investors

The Company, in consultation with the BRLMs, have allocated 2,31,91,374 Equity Shares to 21 Anchor Investors (through 22 Applications) at the Anchor Investor Offer Price of ?140 per Equity Share in accordance with the SEBI Regulations. This represents 60% of the QIB Portion.

The Board of Directors of our Company on November 29, 2023 has taken on record the Basis of Allotment of Equity Shares approved by the Designated Stock Exchange, being NSE and has allotted the Equity Shares to various successful Bidders. The Allotment Advice-cum- Intimations and/ or notices will be dispatched to the address of the investors as registered with the depositories. Further, the instructions to the Self Certified Syndicate Banks for unblocking of funds, transfer to Public Issue Account and payment to non-Syndicate brokers have been issued on November 29, 2023. In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares Allotted to the successful Allottees have been uploaded on November 29, 2023 for credit into the respective beneficiary accounts subject to validation of the account details with the depositories concerned. The Company has filed the Listing application with NSE and BSE on November 29, 2023. The Company has received listing and trading approval from BSE and NSE and the trading will commence on or about November 30,2023.

Note: All capitalised terms used and not specifically defined herein shall have the same meaning as ascribed to them in the Prospectus.

The details of the allotment made will be hosted on the website of the Registrar to the Offer, Link Intime India Private Limited at: www.linkintime.co.in

All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the First/ sole Bidder, Bid cum Application Form number. Bidder DP ID, Client ID, PAN, date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares applied for, the name and address of the Designated Intermediary where the Bid cum Application Form was submitted by the Bidder and a copy of the Acknowledgment Slip received from the Designated Intermediary at the address given below:

Link Intime India Private Limited

C-101,1" Floor, 247 Park, L.B.S. Marg, Vikhroli West Mumbai - 400 083, Maharashtra. India

Tel: +91 22 4918 6000

E-mail: fedbankfinancialservices.ipo@linkintime.co.in

Website: www.linkintime.co.in

Investor Grievance ID: fedbankfinancialservices.ipo@linkintime.co.in

Contact Person: Shanti Gopalkrishnan

SEBI Registration No.: INR000004058

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF FEDBANK FINANCIAL SERVICES LIMITED

FEDBANK FINANCIAL SERVICES LIMITED has filed the Prospectus with RoC. The Prospectus is available on the website of SEBI at www.sebi.gov.in. as well as on the websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchanges of India Limited at www.bseindia.com and www.nseindia.com, respectively, and is available on the websites of the BRLMs, i.e. ICICI Securities Limited, BNP Paribas, Equirus Capital Private Limited and JM Financial Limited at www.icidsecurities.com, www.bnpparibas.co.in , www.equirus.com and www.jmfl.com. respectively. Any potential investors should note that investment in equity shares involves a high degree of nsk and for details relating to such risk, please see the section entitled ‘ Risk Factors' on page 27 of the Prospectus.

This announcement is not an offer of securities for sale in the United States or elsewhere. The Equity Shares offered in the Offer have not been, and will not be. registered under the U.S. Securities Act of 1933. as amended {the "U.S. Securities Act") and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity Shares are only being offered and sold outside the United States to investors that are not U.S. persons, nor persons acquiring for the account or benefit of U.S. persons, in offshore transactions' as defined in and in compliance with Regulation S under the U.S Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. There will be no offering of securities in the United States.