Fino Payments Bank IPO: All you need to know

IPO size: ₹1,200 crore
Fresh issue: ₹300 crore
Offer for sale: ₹900 crore
Price band: ₹560-₹577 per share
Lot size: 25 shares
Cost per lot: ₹14,425

IPO Timeline
Start Date: 29 Oct 2021
End Date: 2 Nov 2021
Tentative Allotment Date: 9 Nov 2021
Tentative Refund Credit: 10 Nov 2021
Tentative Share Credit in Demat: 11 Nov 2021
Expected Listing Date: 12 Nov 2021

Registrar Information (RTA)
Registrar Name: KFintech Private Limited
Contact: Basavraj Loni
Email: basavraj.loni@finobank.com
Contact Number: +91 22 7104 7027

Key Highlights

• Fino Payments Bank, a subsidiary of Fino Paytech, provides digital financial products and services to its customers
• Its products and services include current account savings account, issuance of debit cards and facilitating domestic remittances 
• The company was incorporated in April 2017 and has expanded its network to pan-India to cover 94% of the districts as of March 2021
• In FY21, its platform facilitated approximately 43.4 crore transactions, up 36.4% year-on-year and had gross transaction value of ₹1.3 lakh crore
• Major stakeholders in the company are BPCL, Blackstone, ICICI Group and IFC among others. 

Reasons for going public

• Augmenting Tier-1 capital

Company Information

Incorporated in April 2017, Fino Payments Bank is a growing fintech company. It offers a broad portfolio of digital financial services to its customers, including current and savings accounts, debit and credit cards, domestic remittances, insurance, loans, and cash management services.

The company is a wholly-owned subsidiary of Fino Paytech. It is backed by a strong set of investors, including Blackstone, ICICI Group, Bharat Petroleum, International Finance Corporation, and Exide Life, among others. In 2020, the company was ranked third among banks in facilitating digital transactions, according to the Ministry of Electronics and Information Technology. 

Below is the consolidated financial information of the company for the last three years:

Strengths

• Offers a wide array of financial products and services, such as opening a digital savings account, issuing debit and credit cards, loans, insurances, bill payments, and recharges.
• Only payments bank in India to offer subscription-based savings account
• Adopted a merchant-led model and capital light business strategy
• A tech-focused business model with significant investments in creating technology infrastructure
• Largest network of micro-ATMs with 55% of the market share
• Has a merchant network of 6.41 lakh as of 31st March 2021

Risks

• Intense competition in the industry
• Stringent regulations and prudential norms
• May face cyber threats attempting to exploit network
• Dependence on merchants and strategic commercial partnerships
• Inability to secure financing in an acceptable and timely manner
• The dominance of cash in financial transactions
• Technology failures

Opportunities

• There are around 12 million kirana stores in India. These merchants provide massive potential for fintech companies and payment banks to grow.
• Higher mobile penetration, improved connectivity and cheap data plans are expected to contribute immensely to the growth of this industry. Experts believe India will shift from a cash-dominated economy to a digital one. 
• CRISIL has forecasted retail digital payments to grow at a Compound Annual Growth Rate (CAGR) of 34% between FY20 and FY25.
• The increasing e-commerce spending by consumers is paving the way for a massive spike in digital transactions. 
• Factors such as favourable demographics, low-cost infrastructure, government initiatives, and changing customer expectations are driving the growth of fintech companies in India.