KFin Technologies trades around issue price on debut | What should investors do?

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26 Aug, 2025 12:21

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KFin Technologies shares had a listing on December 29 almost on a par with the expectations, given the muted subscription numbers for the public issue, consistent volatility in the market, and the issue being entirely an offer-for-sale.

In fact, the issue price largely discounted all positives. Hence, analysts advised to hold the shares for the long term, citing an asset-light business model, bright prospects, a diverse products portfolio, and being a proxy play to mutual fund industry growth in India.

The stock opened at Rs 367 and has been trying hard to hold its issue price of Rs 366, though it managed to hit an intraday high of Rs 373 in middle of trade. So far, it traded with volume of 63 lakh shares on the NSE, and over 4 lakh shares on the BSE at the time of writing this article.

It was available at the upper price of the band at 41.3x P/E, on FY22 EPS, with market capitalisation of Rs 6,133 crore after the issuance of shares. The company has significant scope for growth, considering its diverse product portfolio and addition of new client base and bright prospects ahead," said Narendra Solanki, Head - Equity Research at Anand Rathi Shares & Stock Brokers.

Investors can continue to hold the stock, he advised.

KFin Technologies is a leading technology driven financial services platform providing comprehensive services and solutions to the capital market ecosystem, including asset managers and corporate issuers across asset classes in India.

It also provides several investor solutions, including transaction origination and processing for mutual funds and private retirement schemes in Malaysia, the Philippines and Hong Kong.

Analysts from Chola Securities as well as Prabhudas Lilladher also advised investment in KFin with a long-term horizon.

"KFin's financial track record is strong in revenue as well as margin terms. Its asset-light service-based model is attractive from a profit generation point of view. It is proxy play to mutual fund industry growth in India and it is priced in lines with leader in the industry Computer Age Management Services (CAMS) which is 39-times price to earnings," Chola Securities reasoned.

CAMS has been reporting consistent growth in earnings with profit in FY22 rising 40 percent to Rs 287 crore and revenue from operations increasing 29 percent to Rs 910 crore compared to previous year.

But in the half-year ended September FY23, it has seen a moderate growth of nearly 1 percent in profit at Rs 136.92 crore compared to same period last year, impacted partly by higher employee cost, while revenue during the same period increased by 12 percent to Rs 479 crore.

CAMS has given nearly 80 percent return from its issue price since listing in October 2020.

While explaining reason for a long-term call on KFin, Prabhudas Lilladher's advisory team said: "KFin is India's largest investor solutions provider to Indian mutual funds, based on the number of AMC clients serviced. It is providing services to 24 out of 41 AMCs in India, representing 59 percent of the market share based on the number of AMC clients."

It is one of only two players of scale in India's issuer solutions space where the company holds a 46 percent market share based on the market capitalization of NSE500 companies, the PL said.

KFin had a 40 percent and 29 percent market share based on the number of mainboard IPOs handled in FY22 and H1FY23, respectively. Through its acquisition of Hexagram, it serves six AMCs in India on fund accounting. It is servicing 301 funds of 192 asset managers in India, representing 30 percent market share based on the number of AIFs being serviced as of September 2022.

KFin clocked profit at Rs 148.5 crore on revenue of Rs 639.5 crore for the year ended March FY22, against loss of Rs 64.5 crore on revenue of Rs 481.1 crore for FY21. In six months period ended September FY23, profit came in at Rs 85.3 crore on revenue of Rs 348.8 crore.

The benchmark indices remained largely volatile after recent correction and on Thursday, both the indices traded lower. In current month, both corrected more than 3 percent on weak global cues, after healthy performance in previous two months.

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