Fino Payments Bank’s Rs 1,200 crore initial public offer (IPO) was subscribed 51 per cent on the first day of its issue, according to subscription data on the stock exchanges. The fintech company’s public offer opened for subscription today for investors, and will close on November 2.
On Friday, retail individual investors (RII) showed greater interest as the portion reserved for them was subscribed 2.73 times – the highest among the three groups of investors. The portion set aside for the qualified institutional buyers or QIB remained unsubscribed, while the portion reserved for the non-institutional investors was subscribed 0.05 times.
For the public offer, Fino Payments Bank has fixed a price band of Rs 560-577 per share. A retail-individual investor can apply for up to 13 lots – 325 shares or Rs 187,525. Axis Capital, CLSA India, ICICI Securities and Nomura Financial Advisory are the lead managers to the issue.
The primary market offering will include a fresh issue of Rs 300 crore and an offer for sale of up to 1,56,02,999 shares by the promoter Fino Paytech. The company will utilize net proceeds from the fresh issuance to augment its Tier – 1 capital base to meet future capital requirements.
”At the higher end of the price band, Fino Payments Bank IPO is aggressively valued at 235 times FY21 earnings (on a post issue basis). However, given its niche position, the bank could command a steep valuation. The bank generates over 95 per cent of its income through fees and commissions.
Given the company’s strong topline growth, robust outlook due to digital payments opportunity, but steep valuations, investors who wish to take exposure to an upcoming novel fintech space could consider investing in this issue. However, given the aggressive valuations, the issue may not see high listing gains,” SEBI-registered investment advisor said in a report.