Fino Payments Bank IPO subscribed 13% on bidding debut

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Fino Payments Bank
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The initial public offering of fintech company Fino Payments Bank has been subscribed 13 percent, so far, as investors have put in bids for 14.52 equity shares against IPO size of 1.14 crore equity shares on October 29, the first day of bidding.

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The total offer size for public has been reduced to 1.14 crore equity shares, from 2.09 crore shares earlier, after the company garnered Rs 538.78 crore from anchor investors on October 28.

Retail investors have bought 70 percent of shares against the portion reserved for them, and employees have put in bids for 300 equity shares against the reserved portion.

A portion set aside for non-institutional investors and qualified institutional buyers are yet to put in their bids.

The payments bank that has been profitable since the fourth quarter of financial year 2020, intends to raise Rs 1,200 crore through the offer that comprises a fresh issue of Rs 300 crore and an offer for sale of Rs 900 crore worth equity shares by only promoter Fino Paytech. The issue will close on November 2, 2021.

Fino Paytech is backed by several marquee investors, including Intel Capital Corporation, ICICI Bank, Blackstone GPV Capital Partners (Mauritius) VI-B FDI, International Finance Corporation, HAV3 Holdings (Mauritius) and Bharat Petroleum Corporation.

The fresh issue proceeds is going to be used for augmenting its Tier – 1 capital base to meet its future capital requirements.

Marwadi Financial Services has assigned a subscribe rating to this IPO as the company has an asset light and scalable business model with operational experience and expertise. “Also, it has unique DTP (distribution, technology, partnerships) framework that enables to serve the target market efficiently.”

Since 2017, the fintech company that offers a diverse range of financial products and services, has grown its operational presence to cover over 90 percent of districts as of September 2021. It operates an asset-light business model that principally relies on fee and commission-based income generated from its merchant network and strategic commercial relationships.

The company clocked profit of Rs 20.47 crore in FY21 against loss of Rs 32.03 crore posted in FY20. The profit in quarter ended June 2021 was at Rs 3.1 crore, up from Rs 1.85 crore in June 2020 quarter.

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