General Atlantic and Kotak Mahindra Bank-backed KFin Tech may launch IPO on Dec 19; eyes Rs 6,300-crore valuation

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Top private equity fund General Atlantic-promoted KFin Technologies is likely to launch its initial public offer (IPO) on December 19, 2022 as the leading tech-driven financial services platform for asset managers looks to raise around Rs 1,500 crore, multiple industry sources with knowledge of the matter told Moneycontrol.

“The plan is for the anchor book to open on December 16 with the issue launch likely between December 19 and December 21 for public investors," said one of the persons cited above.

A second person told Moneycontrol that the firm is targeting a valuation of around Rs 6,300 crore for the proposed IPO. The issue will solely be an OFS ( offer for sale) with promoter General Atlantic as the selling shareholder, this person added.

Two others persons confirmed the above launch details. “KFin is a fast-growing firm with an international presence and diversified revenue streams,” one of them elaborated.

All the four persons cited above spoke to Moneycontrol on condition of anonymity.

In response to a detailed email query from Moneycontrol, KFin Technologies said, “We would like to bring to your attention that the details of the valuation of the Company and various qualitative statements about the Company’s businesses disclosed in the Moneycontrol News Reports (contents of which are attached), are not based on information provided in the Draft Red Herring Prospectus dated March 31, 2021 (“DRHP”), or the red herring prospectus dated December 10, 2022 (“RHP”), and are, in our view, speculative in nature."

ICICI Securities, Kotak Mahindra Capital, Jefferies, IIFL Securities and JP Morgan are the investment banks working on the IPO. AZB & Partners and Shardul Amarchand Mangaldas are the legal advisors, according to the DRHP.

Other than majority shareholder General Atlantic, Kotak Mahindra Bank is also an investor in KFin Technologies. The private sector lender acquired nearly 10 percent stake in the firm last year by investing Rs 310 crore as primary infusion in the company. Private equity firm Warburg Pincus backed CAMS ( Computer Age Management Services) is a peer of KFin and made its market debut on October 1, 2020.

THE KFIN TECH FOOTPRINT

According to its website, KFin Technologies serves the needs of asset managers with clients spanning mutual funds, AIFs (alternative investments), pension, wealth managers and corporates in India and abroad. The company provides SaaS-based end-to-end transaction management, channel management, compliance solutions, data analytics and various other digital services to asset managers across segments, as well as outsourcing services for global players. In addition, the firm also provides several investor solutions including transaction origination and processing for mutual funds and private retirement schemes in Malaysia, the Philippines and Hong Kong.

At end of January 2022, the total AUM of mutual funds serviced by CAMS and KFin Tech stood at 69 percent and 31 percent respectively. However, in terms of the number of AMCs serviced, KFin Tech is the largest investor solutions provider to the mutual fund industry, providing services to 25 out of the 42 AMCs operating at end of January 2022, thereby accounting for 60 percent of the market in terms of clientele.

For the nine months ended December, KFin Tech posted revenues from operations at Rs 458 crore and a net profit of Rs 97.6 crore, representing a year-on-year growth of 35 percent and 313 percent, respectively.