Fintech firm Fino Payments Bank has received approval from the capital markets regulator Sebi to go ahead with its initial public offering (IPO). The company had filed its draft papers in July-end this year.
The public issue comprises a fresh issue of Rs 300 crore and an offer for sale (OFS) of up to 1,56,02,999 equity shares by promoter Fino Paytech Limited. The offer includes a reservation of Rs 3 crore of shares for the company's employees.
The company is expected to raise Rs 1,300 crore through IPO, say the market sources.
Fino Payments Bank has obtained observations from Sebi on October 1, the data on observations issued by Sebi during the week ended October 1 with respect to IPOs showed.
The observations by Sebi are necessary for any company to launch public issues like IPO, follow-on public offer (FPO), and rights issues.
The bank, in consultation with merchant bankers, may consider a pre-IPO placement of Rs 60 crore. If the said pre-IPO placement is undertaken, then accordingly the fresh issue size will be reduced.
As per the draft papers, the bank is proposed to utilise the net proceeds from the fresh issue towards augmenting its Tier – 1 capital base to meet its future capital requirements.
Fino Payments Bank offers a diverse range of financial products and services that are primarily digital and have a payments focus. Since 2017, it has grown its operational presence to cover over 94 percent of districts as of March 2021.
The company became profitable in the fourth quarter of the financial year 2020 and has been profitable in subsequent quarterly periods. In addition, in the fiscal FY20 and 2021, its platform facilitated approximately 318.56 million and 434.96 million transactions, respectively, and had a gross transaction values of Rs 94,452.6 crore and Rs 1,32,930.7 crore, respectively.
It operates on an asset-light business model that principally relies on fee and commission-based income generated from merchant networks and strategic commercial relationships.
Other leading digital payment firms like PayTM and MobiKwik had also filed DRHP in July 2021, which are yet to receive approval from Sebi on their IPO to raise Rs 16,600 crore and Rs 1,900 crore, respectively.
Axis Capital, CLSA India, ICICI Securities, and Nomura Financial Advisory Services are appointed as the book running lead managers to the issue.