After the IPO, Fino Payments Bank will not need new fundraising for the next two years: MD

Fino Payments Bank (FPBL), which plans to enter the market with an initial public offering of Rs 1,200 crore this week, said on Tuesday that after the IPO it would not require further capital raising at the over the next two years to propel growth.
The Mumbai-based bank, a wholly-owned subsidiary of Fino Paytech (FPL), plans to raise around Rs 1,200 crore via an IPO at the upper end of the price range. He set the price range at Rs 560-577 per share. The issue will be open for subscription on October 29 and closed on November 2.

The issuance includes a new issue of equity shares totaling up to Rs 300 crore and an offer to sell (OFS) of up to approximately 1.56 crore of equity shares by Fino Paytech. FPBL, incorporated in 2017, intends to use the net proceeds of the new issuance to increase the bank’s Tier 1 capital base to meet its future capital needs.

“Whatever we do, we will do it lightly. That said, asset light does not mean that we do not invest. We are definitely investing in technology and digital. For most of our main problem, it also needs to be used in digital and technology. Do we need capital immediately after the IPO? The answer is no. This is based on the model and the planning and the transaction-driven approach that we will adopt in the next two years and beyond,” said Rishi Gupta, MD and CEO, Fino Payments Bank, on whether the bank would need additional capital. within the next two years after the IPO.

The bank said that since its inception, about 180 crore has been invested in the technology. “The uniqueness of our technology lies in the way we have built it, it is very simple and intuitive and can also work on a very low network. So the technology interfaces we built bring the uniqueness to Fino again,” Gupta said, adding that the bank has developed many products with partners and will continue to develop more products with partners.

Asked about whether Fino Payments Bank has reached the scale that it will take the next step to become a small financial bank (SFB), Gupta said the bank is not currently focused on conversion because the focus is on bank payments.

“The payment bank itself offers many opportunities. If I look at some of the products that we launched about a year ago or maybe have been around for a few years, there’s still a strong growth chord that’s there. We have set up an infrastructure highway of around 7.7 lakh merchants. We will scale further with these merchant additions and attract more and more customers to the existing infrastructure.

Thus, the growth of the payment ecosystem is itself an important driver for the next two years. SFB is an option that is there with us and maybe at a relevant time when that option really crystallizes, maybe in another year or nine months later we will decide what to do with that option,” he said. underline.

FPBL had become operationally profitable during the 2019-20 financial year. Notably, Fino Paytech (FPL) is backed by renowned investors such as Blackstone, ICICI Group, Intel Capital Corporation, Bharat Petroleum, HAV3 Holdings (Mauritius) Limited and World Bank International Finance Corporation (IFC), among others.

Axis Capital, CLSA India, ICICI Securities and Nomura Financial Advisory and Securities (India) are the lead manager of the offering.