Fino Payments Bank IPO Review – Is it good or bad for investment?

Check Fino Payments Bank IPO details. Find IPO Date, Price, Allotment Date, Grey Market Premium GMP, Listing Date, Good or bad, should I buy, Analysis and ReviewFino Payments Bank IPO (Fino Payments Bank Limited IPO) Details

Mumbai based Fino Payments Bank is coming up with IPO that would open for subscription on 29th October 2021. Fino Payments Bank is a growing fintech company offering a wide portfolio of digital financial products and services in India. Should you invest in Fino Payments Bank IPO? What are the risk factors in this IPO?  Let me do IPO review and indicate whether investors should buy or not.

Also Read: Nykaa IPO Review – Why should you avoid such IPOs now?

About Fino Payments Bank Limited

Company is growing fintech company offering a diverse range of financial products and services that are primarily digital and have payments focus.  They offer such products and services to its target market via a pan-India distribution network and proprietary technologies.

They operate an asset light business model that principally relies on fee and commission based income generated from its merchant network and strategic commercial relationships. Each merchant serves the banking and financial needs of its community, which in turn forms the backbone of its assisted-digital ecosystem, referred to as its “phygital” delivery model (i.e., a combination of physical and digital).

Its products and services include:

1) Current accounts and savings accounts (“CASA”)

2) Issuance of debit card and related transactions

3) Facilitating domestic remittances

4) Open banking functionality (via our Application Programming Interface (“API”))

5) Withdrawing and depositing cash (via micro-ATM or Aadhaar Enabled Payment System “AePS”) and cash management services (“CMS”)

They also manage a large BC network on behalf of other banks. In addition, as a condition of its RBI License they are not permitted to directly provide credit products and thereby are not exposed to the credit risk associated with underwriting credit products.

Fino Payments Bank IPO details

IPO Opening Date 29-Oct-21
IPO Closing Date 02-Nov-21
Issue Type Book Built Issue IPO
Face Value Rs 10 per equity share
IPO Price band Rs 560 to Rs 577 per equity share
Lot Size 25 Shares
Min Order Quantity 25 Shares
Listing at BSE and NSE
Issue Size Total Size: Rs  1,200.29 Crores
Fresh issue: Rs 300 Crores
OFS: Rs 900.29
Book Running Lead Managers Axis Capital, CLSA India, ICICI Securities and Nomura Financial Services

Fino Payments Bank IPO RHP Prospectus

What are Fino Payments Bank strengths?

1) Its unique DTP (Distribution, Technology, Partnership) network helps in better customer servicing

2) Company has focus on technology development and in-house technological expertise

3) It has customer centric and innovative business model

4) Company has highly experienced management team

5) Company with vision of socially inclusiveness and empowerment

What are the Objects of the Offer?

Here are the objects of the IPO offer.

1) Offer for Sale (OFS) Rs 900.29 Crores: Fino Payments Bank IPO Size is Rs 1,200.29 Crores and it contains OFS and fresh issue. Under OFS selling shareholders would sell the shares and company would not get any proceeds from the issue.

2) Fresh issue Rs 300 Crores: Company would use fresh proceeds for the following:

i) Augmenting Bank’s Tier – 1 capital base to meet its future capital requirements.

ii) To meet the expenses in relation to the offer.

Who is the promoter of Fino Payments Bank Limited?

Fino PayTech Limited is the promoter of Fino Payments Bank Limited.

How is the company financial track record?

Here are the total assets, revenues and profits of the company in the last 3 years. Amounts are in Millions.

Particulars FY19 FY20 FY21
Total Assets 6,840.7 6,240.0 10,102.9
Revenues 3,711.2 6,914.0 7,910.3
Profit After Tax -623.8 -320.4 204.7
Profit % -16.81% -4.63% 2.59%

Why to invest in Fino Payments Bank IPO?

Here are the positive factors in this company.

1) Company is a growing fintech company offering a wide portfolio of digital financial products and services in India.

2) Company has unique distribution, technology and partnership (DTP) network that helps better customer servicing. Company has innovative business model and customer centric.

3) Company has generated strong revenue growth in the last 3 years. Its revenues increased from Rs 371 Crore in FY19 to Rs 791 Crores in FY21.

4) Company turned from loss making to profit making in FY2021. It has incurred loss of Rs 62.3 Crores in FY19 Vs profit of Rs 20.4 Crores in FY21.

Risk Factors in Fino Payments Bank IPO

1) Covid-19 pandemic had and may continue to have certain adverse effects in its business, operations and financial conditions.

2) Company undertakes fee and commission based activities. Its financial performance may be adversely affected by an inability to generate income from such activities.

3) Fino Payments Bank is one of the Payments banks in India which are subject to stringent regulatory requirements and prudential norms. Its inability to comply with such laws, regulations and norms may have an adverse effect in its business, results of operations and financial condition.

4) Company has limited operating history as payments bank. One cannot evaluate its growing scale of operations. Future results may not be reflective of its past performance.

5) Company may face cyber threats attempting to exploit its network to disrupt products and support services to customers and any theft of such sensitive data can damage its reputation and adversely affect financial performance

6) Significant portion of its merchant distribution network is located in UP, Bihar and MP. Any adverse changes in the conditions affecting these regions can affect the business.

7) Company has and will continue to introduce new products and services and cannot assure that such products and services will be profitable or not.

8) Some of the operations involve handling significant amounts of cash, making them susceptible to operational risks, including fraud, petty theft etc., which can affect company financial position.

9) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.

Fino Payments Bank IPO dates for subscription, Allotment and Listing

Offer Open 29-Oct-21
Offer close 02-Nov-21
Finalization of Allotment 09-Nov-21
Initiation of Refunds 10-Nov-21
Credit to Demat Account 11-Nov-21
IPO Shares Listing Date 12-Nov-21

Is Fino Payments Bank IPO Price is underpriced or overpriced?

Fino Payments Bank share price band is Rs 560 to Rs 577 per share.

1) Last 3 years average EPS is negative, hence we cannot compute P/E.

2) If we take FY21 EPS of Rs 2.62 and upper price band of Rs 577, the P/E ratio works out to 220x.

3) If we take Q1 FY22 EPS of Rs 0.4 and annualize for FY22, the P/E works out to be 360x.

4) Means company is asking IPO price in the P/E range of 220x to 360x.

3) There are no listed peers who are doing similar business, hence cannot ascertain whether the issue price is overpriced or underpriced.

However if we consider 220x to 360x P/E in general, it is highly priced (as private banks in general are trading at P/E of 5x to 50x and public sector banks are trading at P/E of 6x to 71x (source: moneycontrol))

What is Fino Payments Bank IPO Grey Market Premium?

GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about IPO price as it is unorganized market.

Currently Fino Payments Bank IPO GMP is not available as there are no trading’s happening as of the day of writing the article.

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Fino Payments Bank Limited IPO – Review and Conclusion

Is it good or bad to invest in Fino Payments Bank IPO?

Fino Payments is a growing fintech company offering a wide portfolio of digital financial products and services in India. Company’s unique DTP network helps in better customer servicing. Company has innovative business model.

Company’s revenues have grown significantly in the last 3 years. Company has turned from loss making to profit making in FY21.

The issue price is overpriced.

Investors can avoid such high priced IPOs as of now and can invest when these are available at lower prices during stock market correction.

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Suresh KP


  1. You proved to be right. Not to draw sadistic pleasure after listing of this share at discount however the promotors of such companies are en-cashing the greed of new but not so informed investors. Thanks for your logical analysis. Keep doing the good job.

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