The initial public offering of fintech company Fino Payments Bank had been subscribed 95 percent by the afternoon of November 1, the third day of bidding, with investors putting in bids for 1.08 crore shares against the IPO size of 1.14 crore shares.
The total offer size for public has been reduced to 1.14 crore equity shares from 2.09 crore shares after the company garnered Rs 538.78 crore from anchor investors on October 28.
Retail investors have bought 4.99 times the portion reserved for them, with employees bidding for 32,225 shares.
The portion set aside for non-institutional investors was subscribed 11percent, while portion of qualified institutional buyers booked 2 percent.
The payments bank, which has been profitable since the fourth quarter of the 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 closes 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 will be used for augmenting its Tier – 1 capital base to meet its future capital requirements.
Fino Payments Bank is their preferred pick, said Gaurav Hinduja, Fundamental Research Analyst at GEPL Capital. "Fino payments has a lean merchant-led distribution model that requires minimal capital expenditure and is PAT accretive right from the onboarding," he said.
The income has seen a strong 46 percent CAGR during FY19-FY21, it turned profitable in FY21 (on full year basis).
Digital payments are expected to grow at a 25-27 percent CAGR over FY21-FY25E and Fino would be a key beneficiary given the established platform, resources and operating leverage kicking in, he added.
Since 2017, the fintech company that offers a diverse range of financial products and services has grown its 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 a profit of Rs 20.47 crore in FY21 against a loss of Rs 32.03 crore in FY20. The profit in the quarter ended June 2021 was at Rs 3.1 crore, up from Rs 1.85 crore in June 2020 quarter.
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