Axis Bank Plans to Sell NBFC Business for Up to $1 Billion

Axis Bank, India's third-largest private lender, is exploring the sale of its non-banking financial company (NBFC) subsidiary, Axis Finance Ltd, aiming for a valuation of approximately $1 billion. The bank has engaged investment bank Morgan Stanley to identify potential buyers. This strategic move aligns with the Reserve Bank of India's proposed regulations, which suggest that banks should limit their stakes in subsidiaries to 20% or less and avoid overlapping business operations within group entities. Initially, Axis Bank considered a public listing for Axis Finance but has shifted focus to a private sale, anticipating higher valuations through this route. 

In a related development, Axis Bank completed the acquisition of Citibank's India consumer business and its NBFC consumer business from Citicorp Finance (India) Limited on March 1, 2023. The deal, valued at ₹11,603 crore, added approximately 2.5 million credit cardholders to Axis Bank's portfolio, positioning it among the top three card issuers in the country. This acquisition expanded Axis Bank's retail book by ₹68,000 crore, including ₹28,000 crore in retail loans, and brought in about 3 million unique customers, along with 21 branches and 499 ATMs across 18 cities.

These strategic decisions reflect Axis Bank's efforts to streamline its operations in compliance with regulatory guidelines while enhancing its market position through selective acquisitions and divestitures.