FINO Payments Bank Ltd – IPO

Issue Opens: Oct 29, 2021

Issue Closes: Nov 02, 2021

Price RangeRs. 560 – Rs. 577

Face valueRs. 10/-

Market Lot25

SharesIssue SizeRs. 1200.29 Cr.

Key Strengths and StrategiesDTP Framework:

The bank’s Distribution, Technology, and Partnership (DTP) enables it to serve the target market efficiently and is designed to achieve improvements on three key challenges like scale, service, and sustainability associated with serving such target market.Asset Light Business Model:

Bank’s merchant-led model is a capital-light business strategy in respect of network expansion and except for referrals of third-party loan providers, Fino does not offer any lending products and it does not hold credit risk for loans.Continued Innovation:

Continue Innovation Leading to High Growth Products and Diversified Revenue Streams.

Risks and ConcernsHigh Concentration of Merchants in the Few States:

Out of the total number of ‘own’ merchants, 46% of them are in three states of Uttar Pradesh (70,847), Bihar (58,452), and Madhya Pradesh (38,277) as of June 2021. Also, the revenue from these three states contributes 43% (FY21) and 47% (As of June 2021) to the total revenue.Highly Competitive Industry:

Fino payments bank faces competition across all its products and services from other payments banks, certain fintech companies, microfinance institutions, small finance banks, as well as from scheduled commercial banks, public sector banks, private sector banks, NBFCs, and foreign banks in India.Negative Cash Flows:

In FY20 (-83.67 crores), FY21 (-32.22 crores), and as of June 2021 (-64.06 crores), the bank has negative cash flow from operations.