Fino Payments Bank makes weak debut, lists at 6% discount to issue price

The stock opened at Rs 544.35, a 6% discount to its issue price of Rs 577 per share

Fino Payments Bank made a weak stock market debut, as the shares were listed at Rs 544.35, a 6 per cent discount to its issue price of Rs 577 per share on the National Stock Exchange (NSE) on Friday. On the BSE, the stock opened at Rs 548, a 5 per cent discount to the issue price.

At 10:01 am; Fino Payments Bank was trading at Rs 582.55, a 1 per cent higher over its issue price on the BSE. The intraday high for the stock so far was Rs 583.35.

The initial public offering (IPO) of Fino Payments Bank had received lukewarm response with overall subscribtion of just 2x. The institutional portion was subscribed 1.65 times, the wealthy investor portion by 21 per cent, the retail investor portion was subscribed close to 6 times, and the portion reserved for employees by 93 per cent.

The IPO consisted of Rs 300 crore of fresh fund raise and Rs 900 crore of secondary share sale by promoter Fino Paytech. The bank will use the fresh proceeds to augment its tier-1 capital base to meet its future capital requirements.

Fino Payments Bank is a fintech company offering a diverse range of financial products and services that are primarily digital and have a payments focus. This is the first a payments bank made stock market debut today. Paytm, which too has a payments bank license, will list next week.

As of August 2021, about 51 per cent of micro-ATM deployed in the country is from Fino Payments Bank followed by SBM Bank at 12 per cent & SBI at 8 per cent. Fino had largest network with 7.2 lakh banking touchpoints, followed by Airtel Payments Bank (5 lakhs) & India Post Payments Bank (1.4 lakhs).

The unique framework of distribution, technology and partnership (DTP) enables it to serve target market efficiently and improve on three key challenges - scale, service and sustainability. For period between April, 2021 and August, 2021, the bank has second largest debit card outstanding at 2.88 million. The bank incurs minimal capital expenditure costs in connection with onboarding merchants, because the on-boarding & setup capital expenditure costs are borne by the merchant, ICICI Securities said in a note.

Fintech companies' demand is poised for growth on the back of rising internet penetration, higher disposable income, development of technology, low-cost infrastructure, government initiatives like UPI, etc. Going forward, India presents a huge opportunity for growth of fintechs owing to high potential in the underpenetrated customer segments. To attract mid-to-low-income customers and the rural population, there is a need to develop tailor-made solutions. There will be huge growth potential for players in payments, lending, wealth, Insurance, etc. segments. We believe Fino Bank is one of the key beneficiaries of opportunities in the sector, analyst at Religare Broking said in IPO product note.