HAV3 Holdings Sells Entire Stake In Fino Payments Bank’s Promoter

Shares of Fino Payments Bank declined over 6% during the intraday trading on Thursday (September 19) to INR 371.2 apiece on the BSE after Mauritius-based investment firm HAV3 Holdings sold its entire stake in the company’s promoter Fino PayTech.

In an exchange filing, Fino Payments Bank said that HAV3 Holdings entered into a Deeds of Accession to sell its shares to new investors, including Alternatives Investment Managers and Infinity Alternatives Advisors. Merlin Holdings, Vivek Mundra, the managing director of Avro Commercial, and Kamadgiri Finvest were the other buyers.

However, Fino Payments Bank did not disclose the amount of stake HAV3 Holdings held in the company. It is pertinent to mention that promoter FINO PayTech owns a 75% stake in Fino Payments Bank, the filing showed.

As per the Bank’s draft red herring prospectus (DRHP), HAV3 Holdings held a 11.48% stake in it as of August 2021. 

Founded in 2017, Fino Payments Bank operates on an asset-light business model that principally relies on fee and commission-based income generated from merchant networks and strategic commercial partnerships.

In its annual report for the financial year 2023-24 (FY24), Fino Payments Bank’s managing director and CEO Rishi Gupta said that the company is expanding its product catalogue and has begun offering referral loans through partnerships that validate the creditworthiness of customers.

The Mumbai-based payments bank has also applied for a small finance bank licence with the Reserve Bank of India to shore up its revenue. At the time, Ketan Merchant, chief financial officer of Fino, said, “Our SFB will be a Payments Bank++ model, different from existing players, wherein the fee-based income will constitute 75%–80% of the revenue in the first few years of operation.”

Fino Payments Bank posted a nearly 30% jump in its profit after tax (PAT) at INR 24.27 Cr in Q1 FY25 from INR 18.7 Cr in the year-ago period. 

Revenue from operations climbed 25.4% to INR 436.86 Cr during the quarter under review from INR 348.31 Cr in Q1 FY24. On a QoQ basis, operating revenue was up 8.8%.

Fino Payment Bank operates in the business-to-business space in India’s fast-growing fintech market, which is expected to become a $2.1 Tn opportunity by 2030, as per Inc42 data.

The Bank’s shares recovered a bit from the day’s low to end today’s trading session 1.7% lower at INR 388.35 on the BSE.