Fino Payments Bank IPO: Retail portion fully subscribed nearly 3 times on Day 1

Fino Payments Bank IPO includes a fresh issue of equity shares worth ₹300 crore and an offer for sale (OFS) of 15,602,999 equity shares by the promoter Fino Paytech

Fino Payments Bank ₹1,200-crore initial public offering (IPO) will open for subscription on Friday and the three-day share sale will conclude on November 2. The company has fixed a price band of ₹560-577 per share. Ahead of its IPO, Fino Payments on Thursday said it has garnered ₹539 crore from anchor investors.

At the end of Day 1, Fino Payments Bank IPO was subscribed 0.51 times with retain portion subscribed nearly 3 times.

The share sale includes a fresh issue of equity shares worth ₹300 crore and an offer for sale (OFS) of 15,602,999 equity shares by the promoter Fino Paytech.

“Fino payments bank has posted a 46.0% CAGR in total revenues between FY2019-21 and has also turned around its operations and reported profits of Rs. 20 crores for the first time in FY2021. At the higher end of the price band the stock would be trading at P/E of 220x FY2021 fully diluted EPS of Rs. 2.6 which is expensive. Despite strong growth prospects, we believe that valuations do not justify the premium and hence we have a NEUTRAL recommendation to the IPO,” said Jyoti Roy – DVP- Equity Strategist, Angel One.

Proceeds from the fresh issue would be used towards augmenting the bank’s Tier – 1 capital base to meet its future capital requirements. Axis Capital, CLSA India, ICICI Securities and Nomura Financial Advisory Services are the book running lead managers to the issue.

“With Pan India operational presence in over 90% of district the company has great opportunity to strengthen its business in coming years. We recommend “Subscribe-Long Term” rating to this IPO,” said brokerage Anand Rathi in an IPO note.

Fino Payments Bank or FPBL is a scheduled commercial bank serving the emerging India market with its digital based financial services. The company will emerge as the first payments bank to list on the stock exchanges.

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