Fino Payment Bank IPO

IPO Details:

Price Band: 560-577

Cutoff Price: 577

About Company:

Fino Payment is a growing fintech company offering a diverse range of financial products and services that are primarily digital and have a payments focus. Bank offers such products and services to the target market via a pan-India distribution network and proprietary technologies, and since 2017, Fino has grown their operational presence to cover over 90% of districts as of September 30, 2021.

Competitive Strengths:

1. DTP Framework

2. A Technology Focused Business Model with an Advanced Digital Platform

3. Customer Centricity and Innovation at the core of business

4. An Asset Light and Scalable Business Model

5. Operational Experience and Expertise

6. Socially inclusive model with positive social impact

7. Highly Experienced and Committed Leadership Team, supported by a Marquee Investor Base in Promoter and Shareholder.

Strategies:

1. Leverage Market Position to Capture Industry Opportunities

2. Continued Innovation Leading to High Growth Products and Diversified Revenue Streams

3. Expand and Deepen Customer Sourcing Capabilities

4. Continued focus on use of technology to improve operating leverage.

Financial Performance:

Revenue is increasing and company has become net profitable in FY 2021 and now company is coming out with the IPO. With the EPS of 2.6, the company's P/E is 222.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Augmenting its Tier–1 capital base to meet its future capital requirements

Competitors Comparison:

Fino Payment Bank is the first payment that would get listed on exchange. Other unlisted competitors are Airtel Payment Bank, Paytm Payment and NSDL Payment Bank.

Some features of Payment Bank are:

1. Accept deposit and hold upto ₹ 1 lakh/person

2. Can't issue a credit card

3. Can't give loan service

4. Can't accept deposits from NRI

5. Accept deposit and hold upto ₹ 1 lakh/person deposit in government securities with a maturity of atleast one year

Grey Market Premium:

Our view: As of now, GMP of this IPO is not updated. But looking at the valuation that a Payment Bank is getting compared to commericial or small finance bank, this IPO looks to be overvalued. I won't subscribe to this IPO as there are many interesting IPO lined up in upcoming days.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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