The IPO of Fino Payments Bank, which opened last week, was subscribed 0.8x on the second day till 3pm, up 4.24x from retail subscriptions. The issue will be closed tomorrow. NS ₹The initial public offering (IPO) of Rs 1,200 crore includes a fresh issue of equity shares ₹300 crore and Offer for Sale (OFS) of 15,602,999 equity shares by promoter Fino Petek. The lender has fixed a price band of ₹560-577 per share for its initial public offering.
Allotment and Listing Probable Timeline: According to the brokerage, the allotment is likely to be finalized on November 9 and the listing is likely to happen on November 12. 10% of the issue is reserved for retail investors.
Lot Size: Investors can bid for a minimum of 25 equity shares and thereafter in multiples of 25 equity shares. Keffin Technologies Pvt. Ltd. is the registrar for Fino Payments Bank IPO and will manage the allotment and refund.
In front of the public issue, Fino Payments Bank had gathered ₹539 crore from anchor investors including Fidelity, HSBC Global, Pinebridge, Aditya Birla Sun Life Mutual Fund (MF), Tata Mutual Fund, SBI Life Insurance Company, Invesco, BNP Paribas and Societe Generale.
After the IPO, the stake of promoters and group of promoters will fall from 100% to 75%. The proceeds from the fresh issue will be used to enhance the Tier-I capital base of the Bank to meet its future capital requirements.
Fino Payments Bank Limited is a fintech company offering a variety of payment-focused financial products and services that are primarily digital. The bank offers products and services to its target market through a pan-India distribution network and proprietary technologies. The Payment Bank aims to provide a small-savings account facility, and payment and remittance services to the migrant labor force, low-income households, small businesses and other unorganized sector entities.
“Fino has been successful in creating an asset-light business model and has followed its objective of financial inclusion. The bank has managed to turn a corner that is rare among most of its peers. However, given the intense competition from other digital payment players and modes, its sustainability needs attention. In terms of opportunity, RBI regulations allow Fino to apply for SFB license after 5 years of working as a payments bank, which will open up avenues for huge growth. At the upper end of the price band, Fino trades at 17.1x FY21 BV, 6.1x market cap/sale,” Axis Securities said in a note.
In a note, Anand Rathi said: “The company has an asset lightweight and scalable business model with a strong distribution-technology-partnership framework. The company’s target addressable market is huge with an estimated CAGR growth of 16% over the next four years. This has opened up headroom for the company. Growth is on the way. The bank became operationally profitable in the fourth quarter of FY 2020 and continued to be profitable in the subsequent quarter. We call this IPO “Subscribe-Long Term” Recommend rating.
Its revenue for FY21 was ₹791 crores which grew at a CAGR of 29% in the last three years and the bank registered a profit of ₹20.5 crore in FY21. (with agency input)
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