Federal Bank shares fell as much as 4 per cent in Tuesday’s trade after the lender issued a clarification on reports that it may acquire a controlling stake in Jana Small Finance Bank.

The stock opened flat at ₹357.70 on the National Stock Exchange (NSE) and then slipped to an intraday low of ₹342.05.

As of 2 PM, Federal Bank stock was down 3 per cent at ₹347.05, with around 12 million shares changing hands. It was also the worst performer on the Nifty Bank index.

Meanwhile, Jana Small Finance Bank shares declined 2.1 per cent to ₹569.20 around the same time.

According to an exchange filing by Federal Bank, the lender is not considering any transaction that requires disclosure with regard to the reports that it may acquire a controlling stake in Jana Small Finance Bank. 

"We wish to mention that the Bank evaluates various opportunities in the ordinary course, for growth and expansion of its business. Further, we clarify that there is no material event/ information that requires disclosure...," the filing read.

The south-based private sector lender had reported a 36.78 per cent Y-o-Y jump in consolidated net profit for the June quarter at ₹1,256,09 crore. Its core net interest income grew 26 per cent to ₹2,946 crore on a 15 per cent on-year jump in advances.

The bank's net interest margin increased to 3.33 per cent from 2.94 per cent in the year-ago period. The lender had said that it is aiming for a 0.05 per cent expansion in the NIM every quarter.