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FINO PAYMENTS BANK

IPO Details

ICICI Direct Research Rating : UNRATED
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25 shares
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₹ 560 - 577
₹ Upto 1200 cr
RHP

Timeline

  • 09-Nov-2021
  • 10-Nov-2021
  • 11-Nov-2021
  • 12-Nov-2021

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

About Company

Fino Payments Bank is a growing fintech company offering a diverse range of financial products and services that are primarily digital and have a payments focus. They offer such products and services to their target market, being the unserved and underserved population of Indian society through a pan-India merchant network.
They do not offer any lending products and do not hold credit risk for loans. Their product and service offering includes liability products and other banking products that generate fee and commission-based income, such as CASA, micro-ATMs and AePS transactions, domestic remittances and the issuing of debit cards.

Strengths & Risks

Strengths (3)

Fino Payments Bank DTP Framework

Their unique DTP framework enables them to serve their target market efficiently and is designed to achieve improvements on three key challenges associated with serving such target market, being: (i) scale ; (ii) service; and (iii) sustainability.

Risks (3)

Undertake fee and commission-based activities and their financial performance may be adversely affected by an inability to generate income from such activities

The fees and commissions they charge customers can depend upon a number of factors that are, in part, within their control, which can include their overall business strategy, expenses related to a particular transaction type, the volume of transactions for a product or service or promotions etc.

  • Fino Payments Bank DTP Framework

    Their unique DTP framework enables them to serve their target market efficiently and is designed to achieve improvements on three key challenges associated with serving such target market, being: (i) scale ; (ii) service; and (iii) sustainability.

  • A Technology Focused Business Model with an Advanced Digital Platform

    They have and will continue to invest into technology throughout their business. Such investment has been made with a goal to offer an unparalleled user experience to their customers and empower their merchants to carry out more transactions.

  • An Asset Light and Scalable Business Model

    The merchant-led model is a capital light business strategy in respect of network expansion and except for referrals of third party loan providers, they do not offer any lending products and they do not hold credit risk for loans.

  • Undertake fee and commission-based activities and their financial performance may be adversely affected by an inability to generate income from such activities

    The fees and commissions they charge customers can depend upon a number of factors that are, in part, within their control, which can include their overall business strategy, expenses related to a particular transaction type, the volume of transactions for a product or service or promotions etc.

  • Rely extensively on their information technology systems and any weakness, disruption or failure in such systems, or breach of data, could adversely affect their operations and reputation

    Highly dependent on their information technology systems and their ability to efficiently and reliably process a high volume of transactions, as well as for certain critical functions including financial controls, risk management and transaction processing.

  • May face cyber threats attempting to exploit their network to disrupt products and support services to customers and/ or theft of sensitive internal data or customer information

    Cyber security risks for technology-focused companies and banking organizations have significantly increased in recent years in part because of the proliferation of new technologies, increased digitization of their products and services and the use of the internet technologies for financial transactions.

Financials

Net Worth
Total Income
Total assets
Cash and cash equivalents at the end of the year
Total borrowings
Basic Earnings per share
Profit/Loss after tax

Industry Overview

Payments banks and fintechs have been increasing their presence and reach by increasing touch points through retail outlets which have a widespread presence in India.

Digitisation: Catalyst for the next growth cycle

Higher mobile penetration, improved connectivity and faster and cheaper data speed, supported by Aadhaar and bank account penetration have led India to shift from being a cash-dominated economy to a digital one.

Retail digital payments forecast to grow at a 34% CAGR during FY20 to FY25

CRISIL Research forecasts the digital payments value in India to reach ₹ 3,500 trillion in financial year 2025 from ₹ 1,379 trillion in FY21, translating into CAGR of 25-27% between financial year FY21 and FY25. The growth in the digital transaction can be attributed to rise in smart phones and mobile internet adoption, convenience offered by digital payments, and ubiquitous availability of payment solutions

Ecommerce spending to drive digital transactions

The Indian e-commerce sector has had a phenomenal run in the recent past. The sector has managed to attract consumers and has grown at a ~35% CAGR from ₹ 0.38 trillion financial year 2015 to ₹ 1.72 trillion in financial year 2020 on the back of rising internet penetration, increasing awareness of online shopping, penetration into tier 2 and tier 3 with the help of assisted model (where ecommerce firms tie up with merchants to cater customers) and lucrative deals offered by well-established players and start-ups.

Fino Payments Bank

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25 shares

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

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*The financials mentioned above are sourced from DRHP/ RHP documents.

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