Fino Payments Bank makes a weak start, listing at 6% discount

Fino Payments Bank makes a weak start, listing at 6% discount

Fino Payments Bank made a weak stock market debut as the shares were listed on the National Stock Exchange (NSE) on Friday at Rs 544.35, a discount of 6 per cent from the issue price of Rs 577 per share. The stock opened at Rs 548 on BSE, a discount of 5 per cent from the issue price.

at 10:01 am; Fino Payments Bank was trading at Rs 582.55, which is 1 per cent higher than its issue price on BSE. The intraday high for the stock so far was Rs 583.35.

The Initial Public Offering (IPO) of Fino Payments Bank had received a lukewarm response with an overall subscription of only 2x. The institutional segment was subscribed 1.65 times, the wealthy investor segment 21 per cent, the retail investor share nearly 6 times and the employees’ reserve 93 per cent.

The IPO included fresh fund raising of Rs 300 crore and secondary share sale of Rs 900 crore by promoter Fino Petek. The bank will use the fresh proceeds to enhance its Tier-1 capital base to meet its future capital requirements.

Fino Payments Bank is a fintech company that offers a variety of financial products and services that are primarily digital and focus on payments. It is the first payments bank to debut in the stock market today. Paytm, which also holds a payments bank licence, will be listed next week.

As of August 2021, Fino Payments Bank accounts for about 51 per cent of the micro-ATMs deployed in the country, followed by SBM Bank at 12 per cent and SBI at 8 per cent. Fino had the largest network with 7.2 lakh banking touchpoints, followed by Airtel Payments Bank (5 lakh) and India Post Payments Bank (1.4 lakh).

The unique framework of Delivery, Technology and Partnership (DTP) enables it to efficiently serve the target market and improve upon three key challenges – scale, service and sustainability. For the period between April, 2021 and August, 2021, the bank has the second largest debit card outstanding of 2.88 million. ICICI Securities said in a note that the bank bears the minimum capital expenditure cost in respect of onboarding merchants, as the on-boarding and setup capital expenditure cost is borne by the merchant.

The demand for fintech companies is poised to increase due to increasing internet penetration, higher disposable income, development of technology, low cost infrastructure, government initiatives like UPI etc. Going forward, India presents a huge opportunity for the growth of FinTech. High potential in low penetration customer segments. To attract middle to low-income customers and the rural population, there is a need to develop specialized solutions. There will be huge growth potential for players in areas like payments, lending, money, insurance, etc. We believe Fino Bank to be one of the key beneficiaries of opportunities in this segment, said the analyst at Religare Broking in the IPO product note.

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