KFIN Tech files for mega Rs.2,400 crore IPO

KFIN Technologies, one of the leading registrars in India, has filed its draft red herring prospectus (DRHP) with SEBI for its proposed IPO. The entire IPO of Rs.2,400 crore will be by way of an offer for sale.

In fact, their largest shareholder, General Atlantic Partners, will look at the IPO to take a partial exit from the company and to monetize its holdings. But, first an interesting background to the company, now known as KFIN Technologies.

The company started off in the mutual fund registry business way back in the 1990s and it was originally a division of the Karvy group of Hyderabad. Later it become Karvy Computershare after Computershare of Australia took a stake in the company.

Later after General Atlantic bought most of the stake in 2018, it was rechristened as Karvy Fintech. However, after the Karvy fiasco in 2019, General Atlantic change the name to KFIN Tech.

Currently, the largest shareholder in KFIN Technologies is General Atlantic, which is one of the world’s leading private equity investor. It holds 74.94% stake in KFIN Technologies.

Another 9.98% stake in KFIN Technologies is held by Kotak Mahindra Bank, which had acquired this stake in the year 2021. KFIN provides services and solutions to mutual funds and private retirement schemes in Malaysia, Philippines and Hong Kong.
 

In India, KFIN Technologies is one of the largest investor solutions provider to Indian mutual funds. While CAMS (another listed company) has greater share in AUM, it is KFIN Tech that has a bigger share in terms of number of AMCs clients serviced.

KFIN Technologies provides services to 25 out of the 42 AMCs registered in India giving them a 60% market share in terms of number of AMC clients. It has recently signed up with 2 AMCs yet to launch funds.

KFIN Tech also has a strong presence among alternative investment funds (AIFs), wealth managers as well as pension and corporate issuers in India. In addition, KFIN also services overseas clients in South East Asia and Hong Kong.

Out of the total number of AIFs present in India, KFIN services 270 funds of 157 asset managers. That is roughly 32% market share based on the number of AIFs serviced. KFIN is also one of the two CRAs for NPS.

KFIN Tech also has a strong presence in Asia. It has a total of 16 AMC clients in Malaysia out of 60. In addition it also boasts of 3 clients in the Philippines and Hong Kong. In terms of financials, KFIN reported revenues of Rs.458 crore and net profits of Rs.97.60 crore for the first 9 months of FY22.

That translates into net profit margins of approximately 21.3%. KFIN Tech has appointed ICICI Securities, Kotak Mahindra Capital Company, JP Morgan India, IIFL Securities and Jefferies India as the Book Running Lead Managers (BRLMs) for the issue.

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