IPO: Fino Payments Bank Limited

THE INVESTMENT AND EQUITY RESEARCH CLUB

Issue opens from 29-Oct-2021 to 02-Nov-2021 Sector: Financial Sector

Business Overview Issue Snapshot

Fino Payments incorporated in 2017 is a fintech company Issue Open 29-Oct-2021
offering a wide portfolio of digital financial products and services
Issue Close: 02-Nov-2021
in India. The major products and services offered by the
company are issuance of debit card, facilitating domestic Issue Price: Rs. 560 – Rs. 577 per share
remittances, open banking functionality and Cash Management Lot Size: Multiples of 25 shares
Services. The company also provides other financial products and
Fresh Issue – 300 Cr
services such as third-party gold loans, insurance, bill payments Offer Size:
OFS – 900.29 Cr
and recharges through its merchants partners.

Key Financials Offer Breakup

(in Cr.) FY’19 FY’20 FY’21 Issue Size (Cr)
Categories Allocation
Lower Band
Income 371.12 691.39 791.02
QIB: 75% 900.22
V O YA G E C A P I TA L – I P O N O T E

PAT (62.38) (32.03) 20.47

EPS(in Rs.) (8.00) (4.11) 2.62 NII: 15% 180.04

RONW (%) (32.30)% (21.90)% 14.60% Retail: 10% 120.03

Employees - -
Investment Rationale
▪ Company uses a unique technology focussed business model Tentative timetable
with an advanced digital platform thereby improving its Allotment: 09-Nov-2021
operating leverage as its limits variable costs.
Initiation of Refund: 10-Nov-2021
▪ The company has an asset-light business model as it relies mainly
on fee and commission-based income generated from its Listing: 12-Nov-2021
merchant network and strategic commercial relationships.
Therefore, all the onboarding and setup costs are borne by the IPO Lead Managers
merchant and not the bank. Axis Capital Limited
Lead CLSA India Pvt. Limited
▪ The company has high market share in Micro-ATM segment Managers: ICICI Securities Limited
deploying about 51% of total micro-ATMs in India. Nomura Financial Advisory
Key Risks Registrar: KFin Technologies Pvt. Limited
▪ Revenue generation is predominately dependent on fee and Objective of the issue
commission based activities.
▪ Augmenting Bank’s Tier – 1 capital base to
▪ The company’s operation and reputation could be impacted by meet its future capital requirements.
any weakness, failure or disruption in its information technology ▪ To meet the expenses in relation to the
systems or breach of data. offer.
▪ Payment banks in India are highly regulated and any adverse Broker Outlook
changes in the regulations could hamper the business.
Brokers have issued a “Neutral” rating for the
▪ A significant portion of Fino Payment Bank’s network is issue for both, listing gains and long-term by
concentrated in Uttar Pradesh, Bihar and Madhya Pradesh. considering the unique business model and the
future prospects.
Major Listed Peers
▪ Ujjivan, AU, Suryoday and Equitas Small Finance Bank are listed Summary of Broker Ratings
companies in India whose business portfolio is comparable with
Axis Capital: NEUTRAL
that of the company’s business and its scale of operations.
Source: Draft Red Herring Prospectus, (*)Equity research ICICI Securities: NEUTRAL
Disclaimer: Voyage capital provides the IPO Note with an intention to provide market knowledge. The
IPO Note should not any in manner be considered as a sign of the club's endorsement for the IPO. The Capital Market: NEUTRAL
club takes no responsibility for the outcome of the IPO

29 October 2021 VOYAGE CAPITAL - THE INVESTMENT AND EQUITY RESEARCH CLUB, IIM INDORE IPO – Note