Fino Payments Bank gets SEBI Nod for IPO

The digital driven Fintech player, Fino Payment Bank, has got SEBI approval for its proposed IPO. Fino Payments Bank had filed the DRHP for the IPO in the last week of July. According to estimates, Fino Payments Bank will raise Rs.1,300 crore through the IPO. The next steps are to set in motion the road shows and then file the RHP with the Registrar of Companies.

The IPO will be a combination of fresh issue of shares and an offer for sale. The fresh issue component is expected to be worth Rs.300 crore and the balance will be the OFS. In fact, Fino Payments Bank plans to offer a total of 1,56,02,999 shares at Rs.630-Rs.650 as part of the OFS, in which some of the early investors in the payment bank will dilute their stake.

The fresh issue inflow of Rs.300 crore will be used to enhance its Tier-1 capital as well as bankroll some of its growth plans in the near future. Fino Payments Bank is also contemplating a Rs.60 crore pre-IPO placement and if the same is successful, the total IPO size will be reduced proportionately to the extent of the pre-IPO placement.

Fino Payments Bank primarily operates as a digital platform for financial products and services and offers a one-stop financial solution. It follows an asset-light model with most of its revenues coming from a fee-based pricing model relying on fee and commission flows from merchant networks and other strategic relationships. This boosts ROI.

As of the close of the fiscal 2021, Fino Payments Bank had access to nearly 94% of the districts in India via its purely digital model. These businesses have benefited substantially from the sharply lower pricing of bandwidth and sharp improvements in telecom coverage and broadband capacities post the advent of Reliance Jio.

Check: Reliance AGM 2021

Fino Payments Bank broke even in the Mar-20 quarter and has been profitable in every quarter since then. In FY21, the Fino platform facilitated a total of 43.5 crore transactions with a gross transaction value of Rs.132,931 crore in aggregate. The digitally biased model ensures that growth is scalable limitlessly with limited additional investments required.

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