The IPO size is likely to be of Rs. 1,300 crore and will include a fresh issue of Rs. 300 cr as well as an OFS component
Mumbai, NFAPost: Fino Payments Bank said it has received market regulator Securities Exchange Board of India’s (Sebi) go-ahead for an initial public offering (IPO).
Market sources indicate that the company is likely to raise Rs 1,300 crore. The fintech bank, which filed preliminary IPO papers with Sebi in the last week of July, obtained its observations on October 1, according to a Sebi update.
The fintech bank proposes to utilise the net proceeds from the fresh issue towards technology and digital initiatives.
FPBL is a scheduled commercial bank serving the emerging India market with its digital based financial services. The company is a fully owned subsidiary of Fino Paytech Limited (FPL), a pioneer in technology enabled financial inclusion solutions.
FPL is backed by marquee investors like Blackstone Group, ICICI Group, Bharat Petroleum, Mauritius-based Headland Asian Ventures Fund 3 Ltd (HAV 3 Holdings), and World Bank Arm International Finance Corporation (IFC), among others.
The fintech bank turned profitable in the fourth quarter of FY20 and has consistently made profits for seven consecutive quarters. FPBL is the first profitable fintech to file for an IPO.
Over the last few years, FPBL has witnessed a steep surge in transaction volumes on the back of digitization and proliferation of its banking points. In FY21, the payment bank’s platform has facilitated more than 434 million transactions having a gross transaction value of Rs 1.32 lakh crores.
The company has a strong leadership position in the fintech industry having the largest network of micro ATMs as of March 2021 with a market share of 55%, a robust merchant network of 6.4 lakhs and 25.7 lakh bank accounts.
Digital based transaction focused approach with no credit risk have enabled the growth of FPBL. Its revenue for FY21 stood at Rs. 791 crore that grew at a CAGR of 29% in last three years. The bank registered a profit of Rs. 20.5 crore in FY21 with an annual average ROE of 15%.
Other leading digital payment firms like Paytm and MobiKwik have also filed a draft prospectus to raise Rs 16,600 crore and Rs 1900 crore respectively with the market regulator to go ahead with the IPO but are yet to get a nod.
Investment bankers appointed to the issue are Axis Capital Ltd, CLSA India Pvt Ltd, ICICI Securities Ltd and Nomura Financial Advisory Services Pvt Ltd.