Fino Payments Bank to float public issue on October 29

Fintech company Fino Payments Bank has decided to float its public issue on October 29. The price band and lot size are likely to be announced later this week.

The Fino Payment initial public offering (IPO) will be the second issue to open for subscription this week after Nykaa's Rs 5,352-crore offer.

The offer comprises a fresh issue of Rs 300 crore and an offer for sale of 1.56 crore equity shares by promoter Fino Paytech, which has 100 percent shareholding in the company. The offer includes a reservation of Rs 3 crore worth of shares for the company's employees.

The company, which operates an asset-light business model that principally relies on fee and commission-based income generated from merchant network and strategic commercial relationships, will close the offer on November 2.

Fino Payments Bank plans to utilise proceeds from its fresh issue for augmenting its Tier–I capital base to meet future capital requirements.

The bank in its RHP said it would require additional Tier-I capital for penetration of business/services in uncovered/sparsely covered areas, modernisation to technology (banking) platform, activities to generate awareness of bank's products and services, keeping sufficient capital meeting the regulatory/ compliance requirements to operate as a payments bank. "This future need for capital will be met through internal accruals as well as proceeds of the Offer," the statement said.

Fino Payments Bank offers a diverse range of financial products and services that are primarily digital and have a payments focus. Since 2017, it has grown operational presence to cover over 90 percent of districts as of September 2021.

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The bank turned profitable in the fourth quarter of the financial year 2020 and since then it has been profitable in subsequent quarterly periods. For the time being, there is no listed comparable peer in the payments bank category.

Axis Capital, CLSA India, ICICI Securities, and Nomura Financial Advisory and Securities (India) are the book running lead managers to the issue.