Blackstone picks up stake in Fino for Rs150 crore

Finos product suite includes savings bank accounts, loans, recurring deposits, remittances, insurance and government disbursements Mumbai: Blackstone Advisors India Pvt. Ltd has picked up a stake in Financial Information and Network Operations or Fino Ltd, for Rs150 crore, betting that the country will persist with its drive to ensure more of the population has bank accounts. Fino provides integrated technology solutions and physical network to enable financial inclusion in India, the company said. Its promoters are ICICI Bank Ltd, Corporation Bank Ltd, HSBC Bank, ICICI Lombard General Insurance Company Ltd, IFMR Trust, Indian Bank Ltd, Intel Inc. and Union Bank Ltd. The company has been growing at a compounded annual growth rate (CAGR) of almost 100% in the last few years, riding on the growth opportunities provided by the number of unbanked households in India, remittances and the need for health insurance. We will deploy this money for growth and expanding our customer base and expansion, said Manish Khera, chief executive officer of Fino. Ernst and Young was adviser to the transaction, following which Blackstone will get one board seat. Blackstone will get a 26% stake in the company, according to a person familiar with the transaction. Mint was unable to independently verify this. Finos product suite includes savings bank accounts, loans, recurring deposits, remittances, insurance and government disbursements. It currently has a customer base of more than 20 million. The company acquires more than 50,000 customers a day and handles around 3 million transactions a month, it said in a release. It has a network of 10,000 agents across 22 states and more than 266 districts in the country. Given the low penetration of banking services in the segment, there is a huge upside and growth potential for such companies, said Ravi Trivedy, executive director, insurance, pensions, mutual funds and financial services, at KPMG Ltd. Whichever company has the ability to scale up the distribution, good business model and has good governance will continue to attract private equity investments.

Non-banking finance companies (NBFCs) and microfinance institutions (MFIs) will continue to drive growth in this segment and companies such as Fino that provide technology and processing support will see a huge opportunity, Trivedy said. In May, Kohlberg Kravis Roberts and Co. LP (KKR) and International Finance Corp. (IFC), the private investment arm of the World Bank, together invested Rs440 crore in Magma Fincorp Ltd, a Kolkata-based NBFC. KKR paid Rs236.31 crore for a 14.95% stake, while IFC has invested Rs202.4 crore for a 12.8% stake.

BLACKSTONE GROUP
Balance Sheet
Quarterly Data (All numbers in thousands)

PERIOD ENDING

03/2011

12/2010

09/2010

06/2010

Balance Sheet - Assets Cash and Due from Banks Restricted Cash Premises and Equipment Other Receivables Intangible Assets Other Assets Total Assets Balance Sheet - Liabilities Short Term Debt Other Liabilities Fed. Funds Purchased/Securities Sold Other Payables Minority Interest Long Term Debt 7,325,138 880,830 * 3,283,148 3,338,165 * * 600,836 116,688 3,275,662 3,289,425 7,198,898 6,735,736 851,436 * 3,085,324 2,930,171 * * 542,487 * 2,994,058 2,743,464 6,352,671 1,104,423 * * 1,148,576 2,442,067 14,553,701 19,248,767 588,621 790,399 144,881 1,291,288 2,482,913 13,546,503 18,844,605 1,407,920 * * 1,082,273 2,523,771 12,726,927 17,740,891 896,915 * * 1,164,545 2,564,236 11,847,613 16,473,309

Common Stock Equity Common Par Retained Earnings Other Equity Adjustments

4,421,486 4,418,385 295,544 (292,443)

4,363,096 4,358,794 * 4,302

4,138,224 4,132,225 * 5,999

3,840,629 3,839,019 * 1,610

Total Equity Total Liabilities * = Data not available

4,421,486 14,827,281

4,363,096 14,481,509

4,138,224 13,602,667

3,840,629 12,632,680

BLACKSTONE GROUP
Balance Sheet
Annual Data

PERIOD ENDING

12/2010

12/2009

12/2008

12/2007

Balance Sheet - Assets Cash and Due from Banks Restricted Cash Investment Securities, Net Premises and Equipment Other Receivables Intangible Assets Other Assets Total Assets Balance Sheet - Liabilities Short Term Debt Other Liabilities Fed. Funds Purchased/Securities Sold * 600,836 116,688 * 526,311 * 894 2,802,457 * 1,196,858 1,290,507 * 588,621 790,399 * 144,881 1,291,288 2,482,913 13,546,503 18,844,605 1,038,180 * * * 306,307 2,623,079 5,441,458 9,409,024 1,411,061 * 2,832,858 118,966 1,222,007 2,781,128 891,891 9,257,911 1,032,325 * 7,181,854 64,370 1,881,190 2,202,155 812,306 13,174,200

Other Payables Minority Interest Long Term Debt

3,275,662 3,289,425 7,198,898

2,207,868 * 657,623

173,436 2,384,965 387,000

250,445 6,079,156 130,389

Common Stock Equity Common Par Other Equity Adjustments

4,363,096 4,358,794 4,302

6,017,222 6,014,802 2,420

3,509,157 3,509,448 (291)

4,226,845 4,226,500 345

Total Equity Total Liabilities

4,363,096 14,481,509

6,017,222 3,391,802

3,509,157 5,748,752

4,226,845 8,947,355

* = Data not available