Fino Payments Bank - IPO 👍

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FINO (Financial Inclusion Network Operations) started as a tech company Fino PayTech Limited providing technological solutions, became a payments bank along with 10 other companies in 2015. 

The objective of a payments bank is to widen the spread of payment services and deposit products to small businesses, low-income households, migrant labor workers and other unorganised entities by enabling high volume low value transactions in deposits and payments/remittance services in a secured technology-driven environment.

Key points:

  • Target audience are small business owners & merchants, middle & lower middle class population in rural & semi urban areas
  • FINO has only one business to look after, unlike other players ( ex: Paytm )
  • Revenue is mainly from commissions & fees charged on financial services
  • Least reliance on 3rd part softwares, is a big cost saver for the company 
  • Shift is lifestyle of rural & semi urban population which demands more liquidity along with quick & secure transactions
  • Digital payments are increasing, with lower internet cost & life style changes
  • Increasing E-commerce spending & POS machines in Tier 3 cities & semi urban & rural India
  • Financial Inclusion & govt initiative to reach financial service to rural India



Risks Involved:

  • Small merchants & business owners are backbone of the company revenue
  • Revenue is concentrated to commissions & fees on services offered
  • Any pandemic or sluggish growth can hit target audience badly, which in turn affects the revenue & deposits
  • Strong competition from other players (Banks, NBFCs, MFI, SFB), who look for penetrating to all villages & cities (Pine labs, PayTM, Razorpay, BillDesk, MSwipe, PayNearby, PhonePe, GooglePay, Mobikwik, PayU)

~ IPO Details ~

Book  Running Lead Managers: Axis Capital, CLSA India, ICICI Securities, Nomura Financial Advisory & Securities, KFin Technologies

Promotors:        Fino PayTech Limited.

Subscription:    29-Oct-2021 to 02-Nov-2021

Face value:       10/- 

Price:                560 to 577  (56 times more than face value)

Lot Size:           25 shares

Objective:         Augmenting Bank’s Tier – 1 capital base to meet its future capital requirements

Litigations:       31 cases valued in total 117 crore


~ Overview ~

  • Future outlook appears promising considering Indian demography & penetration of digital payments into rural India
  • Though company reported loss in the past, cashflow is steady & significant chunk is moved to investments 
  • Subscribe for listing gains & square off with > 40% gains
  • Market is going crazy in recent days, Rags are sold at price of Silk, invest responsibly 

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