Jana Holdings has been looking for exit options for some time now while it was initially looking to bring down the holding below 10% by December this year as it needed funds immediately to pay back its bond holders

By Atmadip Ray, ET Bureau

Last Updated: Aug 25, 2026, 08:34:00 PM IST

Shares of Federal Bank fell 3% Tuesday following a news report that the private sector lender is likely to acquire a controlling stake in Jana Small Finance Bank.

Jana Bank’s share also fell 2.5%

According to the report, Federal Bank is in talks with the small finance bank’s promoter Jana Holdings to acquire its 16.9% stake. This would be followed with an open offer.

While Jana Holdings has been looking for options to offload its stake in the bank it promoted for quite some time now, neither Federal Bank nor Jana Small Finance Bank responded to ET’s emails seeking comment on the possibility of a deal.

Both the banks, in their respective regulatory disclosures, said that they evaluate various opportunities in the ordinary course of business from time to time.

Federal Bank’s market capitalisation was Rs 85,350 crore Tuesday, while Jana’s was Rs 6,000 crore. Jana Holdings is not publicly listed.

Federal’s price closed at Rs 347.30 on BSE, recovering from the day’s low of Rs 341.80 while the previous close was Rs 357.90. Jana’s price closed at Rs 567.05, recovering from the day’s low of Rs 560.95.

ET had reported on July 1 that Jana’s holding company was looking to reduce its stake below 10% by December this year to meet its payment obligations to bond holders like TPG Asia.

The payments were earlier due on June 30, but the holding company could not service it forcing it to seek for a deadline extension.

Jana Holdings is a wholly owned subsidiary of Jana Capital. In the last week of June, both the entities separately received approvals from the Bombay stock Exchange (BSE) for a cumulative Rs 1663-crore debt restructuring and extension of the payment deadline to bondholders to December 31, 2026.

Jana Holdings had said during that time that it would pay back the bond holders by selling its stake in the bank.

Jana Holdings had 21.85% ownership in Jana Bank at the end of March 31, 2026. It sold 4.9% to TVS Motor a month ago for Rs 193 crore. It was also looking for a few more strategic buyers but the deal could not take place, resulting in a payment default to bond holders, people familiar with the matter said.