*Axis Bank’s Plan to Sell Axis Finance* *By The Valuation School* *Regulatory Pressure from RBI* Axis Bank is considering selling its wholly owned NBFC subsidiary, Axis Finance, to comply with the Reserve Bank of India's proposed regulations. These regulations require banks to reduce their stake in subsidiaries, including NBFCs, to 20% or below within two years. Additionally, RBI wants to eliminate business overlaps between banks and their non-banking financial arms, making it difficult for Axis Bank to retain full ownership of Axis Finance. *Shift from IPO to Private Sale* Initially, Axis Bank considered taking Axis Finance public through an initial public offering (IPO). However, investment bankers advised that a private sale would fetch a higher valuation. As a result, the IPO plan has been shelved, and the bank is now seeking a complete or majority stake sale. The bank is aiming for a valuation of around $1 billion (₹8,000-10,000 crore), which is twice Axis Finance’s book value of ₹4,000 crore, plus a control premium. Investment bank Morgan Stanley has been brought in to find a buyer. *Buyer Interest and Financial Performance* Several private equity investors have shown interest in acquiring Axis Finance due to its steady growth and presence in India’s financial sector. The NBFC operates in retail and wholesale lending, MSME loans, and insurance-linked lending. For April-December 2024, it reported revenue of ₹3,013.9 crore and a net profit of ₹494 crore, reflecting growth from the previous year. *Alternative Options Considered* Axis Bank explored merging Axis Finance into its own operations to comply with RBI norms. However, this option would be complex, time-consuming, and could lead to asset-liability mismatches. Given these challenges, the bank prefers a private sale and is open to selling 80-100% of Axis Finance if a buyer offers a premium for acquiring control. *Acha laga, react & share karo & follow our social media for more updates & financial content:* ✅ WhatsApp Channel: https://t.ly/BJTRY ✅ Youtube: https://t.ly/lJqST ✅ Newsletter: https://t.ly/L2vK2 ✅ Instagram: https://t.ly/SLIX4 ✅ LinkedIn (Parth Sir): https://t.ly/mN4yj ✅ LinkedIn (The Valuation School): https://t.ly/Hbeh0 *Note:* This post is just for educational purposes and not a buy/sell recommendation.