Fino Payments Bank Limited IPO details – Date, Price, Size, Allotment Status, Subscription

IPO-Note	Fino Payments Bank Limited
Rs-560-Rs 577 per Equity share	Recommendation: Subscribe

Company Profile: –

Fino Payments Bank Limited is a growing fintech company offering a diverse range of financial products and services that are primarily digital and have payments focus. Its product and service offering includes liability products and other banking products that generate fee and commission-based income, such as CASA, micro-ATMs and AePS transactions, domestic remittances and the issuing of debit cards. It generates interchange commission for every transaction that is conducted through micro-ATMs and AePS on its system, regardless of whether the user has a bank account with it or is a customer of another bank. This commission is 0.5% of the transaction amount or Rs. 15.00, whichever is lower Currently it is a wholly-owned subsidiary of Fino Paytech Limited, whose principal shareholders include marquee investors such as ICICI Bank Limited, Intel Capital Corporation, International Finance Corporation, HAV3 Holdings (Mauritius) Limited, Blackstone GPV Capital Partners (Mauritius) VI-B FDI Limited and Bharat Petroleum Corporation Limited.

Issue Details
Objects of the issue	· Augmenting Bank’s Tier – 1 capital base to meet its future capital requirements. ·  To meet the expenses in relation to the offer.
Issue Size	Total issue Size -Rs. 1200.29 Cr. Offer for Sale – Rs. 900.29 Cr. Fresh Issue – Rs. 300 Cr.
Face value	Rs.10.00 Per Equity Share
Issue Price	Rs. 560 – Rs. 577
Bid Lot	25 shares
Listing at	BSE, NSE
Issue Opens:	29th Oct, 2021 – 2nd Nov, 2021
QIB	75% of Net Issue Offer
Retail	10% of Net Issue Offer
NIB	15% of Net Issue Offer

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Financial Performance:

Shareholding Pattern:

Shareholding Pattern	Pre- Issue	Post Issue
Promoters & Promoter Group	100%	75%
Public	–	25%

Source: RHP, EWL Research

Strengths:

• DTP (Distribution, Technology and Partnerships) framework enables it to serve our target market efficiently

• A Technology Focused Business Model with an Advanced Digital Platform

• Customer Centricity and Innovation at the core of business

• An Asset Light and Scalable Business Model

Key Highlights:

• Income derived from all of financial products and services grew at a CAGR of 29.9% for the financial years 2019, 2020 and 2021

• Registered a Net Profit in FY21, after consecutive losses in FY20 and FY19.

• For the three months ended June 30, 2021 and FY21, total fees and commissions combined accounted for 97% and 98% of total income.

• The payments bank’s capital adequacy ratio stood at 56.3% in FY21, compared with 61% in FY20

• As of March 2021, it had a deposit base of Rs 241 crore, more than double the Rs 116 crore in FY20.

Risk Factors:

• A Significant portion merchant network is concentrated in Uttar Pradesh, Bihar and Madhya Pradesh. As of March 2021, 45% of the merchants working with the bank came from these three states.

• Payments banks in India are subjected to stringent regulations and also need to undergo regulatory audits.

Outlook:

Fino Payments Bank operates an asset-light business model that is underpinned by the “phygital” model and relies on merchant networks and other participants. Their merchants are a key element in their distribution network and are typically small neighbourhood shops and businesses, where the owners are from the local community and therefore, benefit from a pre-existing familiarity with the people who frequent their outlets. It has built a Pan-India presence with 724,671 merchants (own and API) as of June 30, 2021. CRISIL Research forecasts the digital payments value in India to reach Rs 3,500 trillion in financial year 2025 from Rs 1,379 trillion in FY21, translating into CAGR of 25-27% between financial year FY21 and FY25. At the higher price band of Rs 577, the offer valued at Price to book value of 29.89x at NAV of 19.30 as at the end of FY21. Fino Payments Bank could be eligible for a small finance bank licence within one year, which would open more growth opportunities. It is one of the two profitable payments banks active in India. Hence, we recommend Subscribe to the IPO

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