Fino Payments Registers Poor Market Debut, Ends 7% Below Issue Price

SUMMARY

On the National Stock Exchange, its shares closed the first day’s trade at INR 535, 7.2% lower than the issue price of INR 577 per share

Its IPO had witnessed a slow initial response; however was eventually booked 2.03 times

The offer had opened at a price band of INR 560 – INR 577 per share

It was a weak debut at the Dalal Street for Fino Payments Bank as its shares listed at a discount of over 5% on the bourses.

The story did not turn out to be much different by the end of the day’s trade on Friday.

On the National Stock Exchange, its shares closed the first day’s trade at INR 535, 7.2% lower than the issue price of INR 577 per share. The closing level was down 1.63% from the listing price of INR 544.35 on the NSE.

Similarly, the payments bank’s shares on BSE closed at INR 545.25 per share, lower by 5.50% from the issue price. It was 0.50% lower than the listing price of INR 548.

Earlier in the day, its shares slumped as much as 11.5% on the BSE to INR 510.80.

The payments bank had received a slow and tepid response for the initial public offer (IPO) of its shares, wherein the offer sailed through on the back of investments coming in during the last day of the offer. The offer was subscribed 2.03 times. The IPO opened at a price band of INR 560 – INR 577 per share in a bid to raise up to INR 1,200.3 Cr.

Noting that the debut of Fino Payments Bank was sluggish in expected lines, Manan Doshi, Cofounder of Unlisted Arena said, “This was mainly due to valuation concerns which were on the higher side.”

“Fino Payments Bank has a unique ‘asset light’ banking model with quality management but has just turned profitable and expensive valuations left investors wary,” he added.

Parth Nyati, Founder, Tradingo said that its shares may continue to remain under pressure post listing because of the competition, regulatory challenges and valuation concerns.

“However, Fino Payment is a fast-growing fintech company and it is one of its kind company to list on the stock exchanges, whereas its unique DTP network and new edge business model provide it an edge. Aggressive investors can look to buy it at 10-20% correction from here for the long term,” he added.

On October 28, Fino Payments Bank raised INR 538.78 Cr from 29 anchor investors, including Invesco, Pinebridge Global Funds and HSBC

The payments bank began its operations in June 2017, after its parent Fino Paytech received a nod from RBI for setting up a payments bank. It competes with Paytm Payments Bank, Airtel Payments Bank, and Jio Payments Bank.

Fino Payments Bank turned profitable in FY21, reporting INR 20.4 Cr in profits and a total income of INR 791 Cr, up 14% YoY. However, its total expenditure increased by 6.5% to INR 770 Cr compared to INR 723 Cr in FY20.