.jpg)
.jpeg)
RatingAVOIDIssue OfferIssue Opens on Oct 29, 2021Issue Close on Nov 02, 2021Total IPO size (cr) 1,200.30Fresh issue 300.00Offer For Sale (cr) 900.30Price Band (INR) 560 – 577Market Lot 25Face Value (INR) 10Retail Allocation 10%Listing On NSE, BSEObjects of the issue ⮚ Augmenting Bank’s Tier – 1 capital base ⮚ Achieve the benefits of listingIssue Break-up (%)QIB Portion 75NIB Portion 15Retail Portion 10Shareholding (No. of Shares)Pre Issue 78,014,996Post Issue 83,214,302Indicative TimetableFinalisation of Basis of Allotment 09-11-2021Refunds/Unblocking ASBA Fund 10-11-2021Credit of equity shares to DP A/c 11-11-2021Trading commences 12-11-2021
Incorporated in 2017, Fino Payments is a growing fintech company offering a wide portfolio of digital financial products and services in India. The company offers a diverse range of financial products and services via a pan-India distribution network and proprietary technologies. Since 2017, they have grown their operational presence to cover over 90% of districts as of September 31, 2021.
⮚ Fino Bank operates an asset-light business model that is underpinned by their “phygital” delivery model (i.e., a combination of physical and digital) and relies on their merchant network and other participants.
⮚ The company is looking to target a population of India which has low levels of financial literacy and technology use and typically does not have access to even basic banking services.
⮚ In 2020, the Ministry of Electronics & Information Technology ranked Fino payments third among banks in facilitating digital transactions in India. According to CRISIL, the company also has the largest network of micro-ATMs and the third-highest deposit growth rate in FY' 2021.
⮚ Fino Banks has built a pan-India presence with 724,671 merchants (own and API) which are typically located in Tier-2 and Tier-3 towns. They currently have approximately 17,430 active BCs across India. Additionally, they operate 54 branches and 130 Customer Service Points (“CSPs”).
⮚ Their retailers also use their existing client connections in their communities to help us cross-sell additional financial products and services like third-party gold loans, insurance, bill payments, and recharges.
The revenues of the company have seen consistent growth in the last 3 years. The company's revenue for FY 2021 was at Rs 791 crore VS Rs 691 cr in FY 2020 while profit for the year in the FY 2021 was Rs 20.4 cr Vs loss of Rs 32 cr in 2020.
The company has a brief history while the margins of the company might expand. Fino Payment is a fast-growing fintech company and it is one of its kind company to list on the stock exchanges. If we consider last year's profit then the PE ratio turns out to be around 235 however it has carried forward losses which is a major concern. Its unique DTP network and new edge business model may garner investors' interest while we have an "AVOID" rating for this on the back of expensive valuation and regulatory risk.
IPO Note
FINO PAYMENTS BANK LIMITED
KEY MANAGERIAL PERSONNEL
⮚ Rishi Gupta is the Managing Director and CEO of the Bank. He is a founding member of the Bank and he was an employee of Financial Information Network and Operations Pvt Ltd (erstwhile name of their Promoter, Fino PayTech Ltd). Prior to joining Fino PayTech Ltd, he worked with International Finance Corporation, ICICI Bank Ltd and Maruti Udyog Ltd.
⮚ Ashish Ahuja is the Chief Operations Officer of the Bank, he joined the Bank with effect on April 1, 2017.
⮚ Ketan Dhirendra Merchant is the Chief Financial Officer of the Bank, he joined the Bank with effect on August 30, 2018.
⮚ Shailesh Pandey is the Chief Sales Officer of the Bank, he joined the Bank on April 1, 2017.
⮚ Vinod Kumar KB is the Chief Information Officer/ Infrastructure and Facilities of the Bank. He joined the Bank with effect from July 18, 2017.
⮚ Bharat Bhanushali is the Head – Business Technology of the Bank, he joined the Bank with effect on April 1, 2017.
⮚ Amit Kumar Jain is the Head of – Business Alliance of the Bank, he joined the Bank with effect on April 1, 2017.
⮚ Anand Bhatia is the Chief Marketing Officer of the Bank and he joined the Bank with effect from February 5, 2018.
⮚ Pratima Pinto Thomas is the Head- Human Resources of the Bank and she joined the Bank with effect from May 27, 2019.
⮚ Basavraj Loni is Company Secretary and Compliance Officer of the Bank, he has been associated with Fino since November 1, 2017, and was transferred to the Bank as Head – Legal and Secretarial with effect from May 6, 2020.
COMPETITIVE STRENGTHS
⮚ Unique DTP (Distribution, Technology, Partnership) network helps in better customer servicing.
⮚ A technology-focused business model with an advanced digital platform
⮚ Customer centricity and innovation at the core of business
⮚ Asset light and scalable business model
⮚ Operational experience and expertise
⮚ The socially inclusive model with positive social impact
⮚ Highly experienced and committed leadership team, supported by marquee investor base in our promoter and shareholder
⮚ The company has a limited operating history as a payments bank.
⮚ The company is engaged in fee and commission-based operations, and their financial performance could be impacted if they are unable to collect revenue from these sources.
⮚ The company relies heavily on their information technology platforms, and any flaw or failure in such systems, as well as a data breach, could have a negative impact on its business.
⮚ The company has introduced new products and services and will continue to do so, but they cannot guarantee that such products and services will be successful today or in the future.
⮚ In the financial years 2019 and 2020, the company made losses.
IPO Note
FINO PAYMENTS BANK LIMITED
COMPARISON WITH LISTED INDUSTRY PEERS
There are no listed companies in India that engage in a business similar to that of the Company. Accordingly, it is not possible to provide an industry comparison in relation to the Company.
FINANCIALS (RESTATED CONSOLIDATED)
Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019Equity Share Capital 445.80 445.80 445.80Other Equity 1,059.67 854.9 1,175.29Net Worth 1,505.47 1,300.70 1,621.09Total Borrowings 1,807.98 1,107.90 829.03Revenue from Operations 7,910.27 6,913.97 3,711.21Expenses 7,705.53 7,234.33 4,335.05Net Profit for the year 204.74 (320.36) (623.84)Margin (%) (16.8) (4.6) 2.6
The Tata Group is one of the country's oldest and largest companies. The company is divided into seven business sectors. It is made up of 96 firms and employs 350,000 people across six continents.
TCS
Tata Consultancy Services was established in the year 1968. It is regarded as India's first software services firm, establishing a new era. Today, it is a global company in 46 nations.
TATA ELXSI
It is extremely popular and is one of the world's top design and technology services providers in the automotive, health and transport industries, etc. The business was first to start on EV software as a design and technology services unit for the Tata Group.
TATA STEEL
Tata Steel is a global Indian steel manufacturer with headquarters in Mumbai, Maharashtra, presently situated in Jamshedpur, Jharkhand. It is a Tata Group Subsidiary.
TATAMETALIKS
A trustworthy brand Tata Metaliks. They are regarded as pioneers in pig iron and pipe production in India.
TATASTBSL
One of the major participants of the Indian Steel industry is Tata Steel BSL Ltd. The company is presently India's 5th biggest secondary steel manufacturer, with an existing capacity of 5.2 million tonnes per annum, supported by over three decades' expectation.
TINPLATE
A subsidiary of Tata Steel Ltd is Tata Tinplate, known as The Tinplate Company of India Limited. Founded in 1920, TCIL is the oldest company in India today. TCIL has a market share of 70 per cent in India.
TIMKEN
The Timken Company is a global producer of covers and products for power transmission. Timken is based in 42 countries.
TATA MOTORS
With the foundation in the year 1945, the Tata Engineering and Locomotive Company continues to grow rapidly. Tata Motors was renamed in 2003. The firm aims to provide clients with accessible and viable choices for automobile finance. It has developed a novel strategy to the financing of vehicles, including low-cost EMI, bullet funding etc., to promote and enhance all of the Tata EVs.
VOLTAS
Voltas founded in the year of 1954 has become a prominent provider of engineering solutions and air conditioning brand and partnered with several important projects.
TITAN
In 1984, Titan Industries, JV of the Tamil Nadu Industrial Development Corporation (TIDCO), became a part of the group.
TRENT
Trent Limited is the retail hand of the Mumbai, Maharashtra headquartered group of Tata. Starting in 1998, Trent manages Westside, one of Mumbai's many expanding retail brands in India, and Landmark, a brick and mortar chain in India.
TATA COFFEE
TGBL's JV founded in 2012 - is welcomed by coffee enthusiasts with the international coffee powerhouse, Starbucks. The next five years will see the quickest shop deployment in the history of Starbucks.
TATA CHEMICAL
1939 – The remote, seaside Mithapur consists of Tata Chemicals. As the firm becomes a market leader, a flourishing community is growing around the facility.
TATA CONSUMER
Tata Consumer Products is a rapidly growing consumer products firm based in Kolkata, West Bengal, India, and a Tata Group affiliate. It is the second-largest tea maker and distributor in the world and one of the biggest coffee producers.
TATA POWER
In the year 1910, Sir Dorabji decided to bring to light the goal of Jamsetji of bringing clean energy into Mumbai through the creation of the first hydropower plant in India. Since then It's been known as Tata Power.
TATA COM
Tata Communications Limited was previously known as an Indian telecom firm named Videsh Sanchar Nigam Limited. Previously, it was a government-owned service provider and was owned by the Telecommunication Department, the Communications Ministry of the government of India.
TTML
The Indian broadband, telecom and cloud service provider is Tata Tele Business Services Limited, previously known as Tata TeleServices Limited. It is an Indian Conglomerate of the Tata Group.
TAML has also worked on the development of special composite containers for transporting various sensitive items utilized by the Indian defence forces throughout the years The Tata Advanced Materials Limited (TAML) Aerospace Division is responsible for the design, manufacture, and supply of composite components, parts, and sub-assemblies for use in aircraft, spacecraft, and helicopters.
NELCO
In 1940, as a groundbreaking electronics firm, Nelco, part of US$ 116 Bn Tata Group, has had numerous firsts to be named over the years.
TATA INVESTMENT
Tata Investment Corporation Limited is an investment-driven non-banking financial business. Tata Investment invests in a broad portfolio of shares, including different functioning and financially sound industries. The Company will pursue a combination of value and growth as its normal investing approach.
INDIAN HOTELS
IHCL has welcomed visitors with a world-class elegance and friendliness from the opening in 1903 of the renowned Taj Mahal Palace in Bombay while being strongly anchored in local tradition and strong global ideals.
TAJ UK
With the acquisition in the year 1982 of St. James Court in London, UK, two years after the business had acquired its first international Hotel in Yemen, Taj Group would now expand internationally.
RALLIS INDIA
Rallis, a TATA company is a Tata Chemicals subsidiary that operates vertically in the Farm Essentials. More than 40 thousand retail stores in India span over 80 per cent of India's districts are reached by 2,300 distributors. Rallis has extensive knowledge of Indian farming, ongoing contacts with farmers, high-quality agrochemicals, branding skills and marketing expertise and an extensive array of crop management solutions.
In India, there are 74 issuers of credit cards, including the top three Indian private banks (HDFC Bank, Axis Bank and ICICI Bank). The credit card markets of India continue to be significantly underpenetrated, though.
HDFC Bank is the market leader with the greatest share in the credit card sector, while the share of City Union Bank is the lowest. Despite the Reserve Bank of India's prohibition on issuing new credit cards in the previous eight months, HDFC Bank has been able to preserve its leading status with a 23.06% market share. Let us consider India's Credit Card market share:
Although commercial banks are certain kinds that serve customers on a daily basis, commercial banks tend to focus on supporting enterprises. Big and small enterprises can utilize commercial banks when a checking or a savings account has to be opened, borrow money, get credit or transfer cash to foreign market companies.
Private banks are banks where private shareholders and not the government own a majority of their holdings. Private sector banks have private promoters, they are managed and controlled and they are allowed to function according to market forces. There are typically regulated hence guaranteeing the security of public deposits entrusted to such entities and is also governed by directives issued periodically by central banks.
Private Sector Banks AXIS BANK LTD731192211.44%DCB BANK LTD46900.01%DHANALAKSHMI BANK LTD60210.01%FEDERAL BANK LTD206870.03%HDFC BANK LTD1474286223.06%ICICI BANK LTD1145868217.92%IDBI LTD377390.06%IDFC Bank Limited4570150.71%INDUSIND BANK LTD16182622.53%JAMMU AND KASHMIR BANK852450.13%KOTAK MAHINDRA BANK LTD24192033.78%RATNAKAR BANK LIMITED30071874.70%TAMILNAD MERCANTILE BANK LTD311500.05%YES BANK LTD9971811.56%
Public sector banks are the largest kind of government-controlled banks in India, with a majority share (i.e. above 50%) held by the Government of India's finance ministry or Indian state finance ministry. Gazette officers are those employed by officers and their subsidiaries. The workers that work for these particular organizations and their subsidiaries are likewise fully qualified officials. These banks' shares are listed on the stock exchanges.
Public Sector Banks BANK OF BARODA6792711.06%BANK OF INDIA1661240.26%BANK OF MAHARASHTRA633020.10%CANARA BANK8825771.38%INDIAN BANK1352710.21%INDIAN OVERSEAS BANK660160.10%PUNJAB NATIONAL BANK3116120.49%STATE BANK OF INDIA1240506819.40%UNION BANK OF INDIA5131080.80%
The majority of foreign banks in India are foreign bank subsidiaries. They come from overseas promoters and are managed. In India, some international banks are Citibank, Bank of America, Standard Chartered Bank and Hong Kong Bank.
Foreign Banks AMERICAN EXPRESS14575442.28%BANK OF AMERICA239280.04%CITI BANK25939994.06%HONGKONG AND SHANGHAI BKG CORPN8105711.27%SBM Bank India1821670.28%STANDARD CHARTERED BANK LTD14038632.20%AU SMALL FINANCE BANK LIMITED352080.06%
The expenditure on credit cards grew strongly, from 2015 to 2019, with the CAGR rising by 32 percent. In all, the increase in credit card expenditures should still reach Rs. 15 trillion by 2024. The Government has fostered its goal of a cashless society, digitization, e-commerce and the growth of its POS infrastructure.
India is planning a proposal to let foreign investors buy up to 20 percent stakes in the upcoming LIC IPO. The whole information was provided by a person with knowledge of the matter, that would allow them to participate in the nation’s biggest IPO i.e LIC.
The listing of LIC as an IPO is the government’s biggest move towards public offering as the government is expecting to raise 900 billion rupees from its stakes sale.
Also, the government is planning to amend its FDI rules so that the investors will purchase shares without the government’s approval. According to the act of parliament of India, LIC is a special Indian entity, and hence not all have an opportunity to buy its stakes.
Besides, GOI, the RBI, and IRDAI also regulate foreign investment in the Indian insurance sector.
As of now, the FII’s are allowed to hold up to 74% of private insurance companies and 20% up to state-owned banks, however, they have no right to buy shares in LIC.
The amendment in FDI rules would allow foreign pension funds, mutual funds, insurance companies to participate in LIC IPO i.e India’s biggest life insurer.
Before the year ends, the government is all set to complete its listing procedures and hence selected 10 merchant banks out of 16 that had bid to manage LIC IPO.
The government has selected the top 10 global and Indian merchant bankers to manage the mega-IPO of the country’s largest insurer LIC.
According to the department of investment and public asset management, GOI has appointed Goldman Sachs, Nomura Financial Advisory and Securities, Citigroup, JP Morgan Chase, Bank of America Securities, JM Financial, SBI Capital Market, Axis Capital, ICICI Securities and Kotak Mahindra Capital to manage the mega initial public offering of LIC.
Furthermore, the Government of India also selected Kfintech as the registrar, share transfer agent and concept communications as the advertising agency before launching the LIC IPO.
According to DIPAM (Department of Investment and Public Asset Management) secretary Tuhin Kanta Pandey, the government has finalized the book-running led managers and other advisors for LIC IPO.
Also, on July 15, 2021, the disinvestment department received several applications for the appointment of merchant bankers. As a result, 10 out of 16 bankers have been selected. After this, 16 merchant bankers had prepared presentations for managing the listing and disinvestment of LIC.
Looking actively at the whole matter, DIPAM had already appointed a legal advisor for the stake sale and the last date for placing bids for the same was 16 September.
The government also allows foreign investors to buy stakes in LIC IPO. However, as per the LIC Act, there was no provision for foreign investment earlier, the GOI along with SEBI has come with proposed norms regarding FII’s participation as a result of which they are allowed to purchase up to 20 per cent in this IPO.
If you look at the size of the IPO, then it is expected to be far larger than any other IPOs that have launched in the primary market.
The public listing of LIC will give bountiful benefits to the Indian government as its disinvestment target will be Rs 1.75 Lakh Crore in FY 2021-22.
This financial year, Rs 8,368 Crore has been mopped up through minority stake sale in PSU and sale of specified undertaking of the unit trust of India stake in Axis Bank.
After selecting the best merchant bankers for managing the LIC IPO, the fresh move that will be taken by LIC is to draft DRHP next month. As per the finance ministry official, the plan is to bring the IPO within this fiscal, and we have set fixed timelines in regards to the IPO.
The DRHP would be filed in November 2021, i.e next month. Once the Draft Red Herring Prospectus is filed, the merchant bankers will open domestic and global roadshows for investors all over the world.
The government has appointed Cyril Amarchand Mangaldas as a legal advisor for the IPO.
The government’s objective then is to list the insurance behemoth within the current financial year ending in March 2022. The ministry is in the process of getting the embedded value of the LIC and once that is done, the ministerial panel will decide the government stake that will be divested in the IPO.
The listing of LIC is important as through it, the government will get a benefit of Rs 1.75 Lakh Crore.
As per the economic time’s report, three companies including national fertilizers limited, Mishra Dhatu Nigam and Rashtriya Chemicals and Fertilisers Limited are likely to get divested through an offer for sale before LIC IPO launching.
It is estimated that 10% of stake sale of LIC would give a big amount of Rs 1 Crore to 1.5 Crore.
The price band of LIC IPO is estimated at Rs 400-600 shares taking into account total capital and valuation. The paid-up capital is reported is Rs 25000 Crore while the total valuation of the IPO would be between 10-15 Lakh Crore.
The renowned company offers numerous life insurance plans, money back plans, term life insurance plans and more.
LIC covered a market share of 69% in the life insurance space.
LIC also offers other businesses such as LIC Housing Finance, LIC Pension Fund, LIC Mutual Fund, LIC Card Services.
As per the new norms, foreign investors’ participation is allowed in the LIC IPO.
सोने और चांदी की कीमतों में तेज़ी पिछले सप्ताह भी जारो रही। घरेलु वायदा बाजार में सोना पिछले सप्ताह 400 रुपये तेज़ हो कर 47600 रुपये प्रति दस ग्राम के स्तरों पर कारोबार किया। जबकि चांदी के भाव 2300 रुपये तेज़ हुए जिससे कीमते 65500 रुपये प्रति किलो पर पहुंच गई।
विश्व बैंक ने गुरुवार को अपने नवीनतम कमोडिटी मार्केट आउटलुक में कहा कि ऊर्जा संसाधनों की कीमतें 2021 में 80 प्रतिशत से अधिक बढ़ी जिसके कारण कई विकासशील देशों में निकट अवधि के लिए वैश्विक मुद्रास्फीति का जोखिम बढ़ गया है।
बहुपक्षीय विकास बैंक के अनुमान के मुताबिक साल 2022 की दूसरी छमाही में ऊर्जा की कीमतों में गिरावट शुरू हो सकती है क्योंकि आपूर्ति संकट कम हो जायेगा, साथ ही कृषि और औद्योगिक धातुओं की कीमतों में भी गिरावट होगी जिनकी कीमते 2021 में काफी उचे स्तरों पर पहुंच चुकी है।
उच्च खाद्य कीमतें भी खाद्य-मूल्य मुद्रास्फीति को बढ़ा रही है और कई विकासशील देशों में खाद्य सुरक्षा के बारे में सवाल उठने लगे है। जिससे कीमती धातुए जो मुद्रास्फीति से सुरक्षा का बेहतर विकल्प है, की मांग मजबूत है।
दुनिया की प्रमुख केंद्रीय बैंको द्वारा कोवीड -19 का असर कम होने पर एसेट टेपरिंग पर विचार शुरू कर दिया है लेकिन, आपूर्ति में बाधा रहने से औद्योगिक उत्पादन घटने लगा है जिससे डॉलर जो सोने के विपरीत दिशा में चलता है, में पिछले सप्ताह गिरावट रही है और सोने के भाव में तेज़ी है। खुदरा मांग मजबूत रहने से भी कीमती धातुओं के भाव में तेज़ी है।
घरेलु सराफा बाज़ारो में दिवाली के पहले सोने और चांदी की खुदरा मांग बढ़ने की सम्भावना है जिससे इनके भाव में तेज़ी रह सकती है। घरेलु वायदा सोने में 47200 रुपये पर सपोर्ट है और 48000 रुपये पर प्रतिरोध है। चांदी वायदा में 63700 रुपये पर सपोर्ट और 66000 रुपये पर प्रतिरोध है।
Welcome! Today, we’re going to delve into the concept of contingent liabilities—a key aspect of financial reporting that often confuses many. Contingent liabilities are potential obligations that may arise depending on the outcome of uncertain future events. Let’s break down what they are, why they matter, and how they are reported.
Contingent liabilities are potential financial obligations that depend on the occurrence of uncertain future events. They are not guaranteed to occur but represent possible future liabilities that could affect a company’s financial position.
Contingent liabilities are an important aspect of financial reporting that help stakeholders understand potential future obligations. Proper disclosure and assessment of these liabilities provide valuable insights into a company’s financial position and risk exposure. Always stay updated about how contingent liabilities are reported and their potential impact on financial statements.
Trust Our Expert Picks
for Your Investments!
.webp)
.png)
.png)
