Fino Paytech to further dilute equity to raise Rs 250 cr

Financial services firm Fino Paytech is targeting to raise up to Rs 250 crore in equity for expanding its flagship payments bank and also the non-bank finance business, a top official has said.

"We're in discussions to raise Rs 200-250 crore. Hopefully, we should finish it in the next three months or so," Rishi Gupta, managing director and chief executive, told PTI recently.

He said the company is in talks with three investors regarding the fund raising plan, which will be carried out through fresh issue of equities to a mix of both financial and strategic investors.

Ahead of the launch of the bank, it had raised Rs 400 crore, which included Rs 250 crore from state-run oil marketer BPCL and ICICI Bank and its general insurance arm.

Gupta said the stake to be parted with in the current round of fund raising will be much less than the 21 per cent it had given to BPCL due to higher valuation now, but declined to spell out how much is the valuation now.

He said any strategic investor has to be of help either from distribution, technology and products perspective and the same will be seen in this round as well.

The money raised used will be deployed for expanding distribution and marketing activities for the payments bank and also increasing the loan-book at its non-banking lending arm, he said.

The bank is targeting to break even in FY20, a year after it achieves the same at the holding company level, Gupta said, adding once the bank breaks even, it will go for an IPO.

At present, the company counts on strategic investors including ICICI Bank, LIC and BPCL, while Blackstone, Intel Capital and IFC are among the financial investors, Gupta said, adding none of the financial investors are not in a hurry to exit.

Since its launch, the bank has opened 5 lakh customer accounts and deposit has grown up to Rs 100 crore, he said.

Signalling a shift in strategy, Gupta said it will focus on fee-earning transactions rather than opening of bank accounts, which costs money.

Across all its services like banking correspondents for commercial lenders, micro ATMs and remittances, its cash handling will be doubling to Rs 100 crore a day in 10 lakh transactions, up from Rs 50 crore in four lakh transactions, he said.

The bank is planning to open 150 branches next fiscal, with a majority of them likely to come at BPCL outlets, Gupta said, adding there are 425 branches and 100 single-person branches at BPCL fuel outlets.

It's adding newer states like Odisha, Bengal, Gujarat, Andhra Pradesh and Telangana to its network, he said, adding the number of cities covered has already risen to 80 from 35, in July 2017.

The present "distractions" faced by the state-run banks due to the nearly Rs 13,000-crore PNB scam has impacted the focus on the rural area activities and is serving as an opportunity for Fino.

Gupta said Fino is aiming to become the largest distributor of financial services in the mass market, adding its insurance sales for ICICI and other companies have grown four times in the past three months alone.

It also originates up to Rs 60 crore of gold loans a month for ICICI Bank and is in the process of launching to sell gold coins and also mutual funds, he said.

The bank has also received a go-ahead from RBI to tie up with universal banks for taking care of deposits of over Rs 1 lakh, which will go in automatically as a saving or current account deposit, he said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)