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Fino Payments shares drop 11% intraday on debut, before ending 6% down

Weak debut follows modest response to the firm's share sale. Its Rs 1,200-cr IPO was subscribed just two times

Ashish Chauhan, MD&CEO, BSE presents a memento to Rishi Gupta, MD&CEO, Fino Payments Bank and Ketan Merchant, CFO, Fino Payments Bank at the listing ceremony at BSE
Ashish Chauhan, MD&CEO, BSE presents a memento to Rishi Gupta, MD&CEO, Fino Payments Bank and Ketan Merchant, CFO, Fino Payments Bank at the listing ceremony at BSE

Fino Payments Bank had a disappointing stock market debut with its stock dropping as much as 11 per cent. The company is the first payments bank to list. Its stock recovered some ground to end at Rs 545, down Rs 32, or 6 per cent, over its IPO price of Rs 577. The stock touched a low of Rs 511 and a high of Rs 583 on the NSE where nearly Rs 550 crore worth of shares got traded.

At the last closing price, Fino Payments Bank is valued at Rs 4,537 crore. Its book value per share is about Rs 55, as per analysts.

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The weak debut follows modest response to the company’s share sale. Its Rs 1,200-crore initial public offering (IPO) had managed to garner just two times subscription. 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.

Its IPO comprised 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’s parent Fino Paytech counts BPCL (22.9 per cent stake), Blackstone (15.1 per cent), ICICI Prudential Life (9.1 per cent), Intel Capital (5.7 per cent) as its shareholders.

Following the IPO, Fino Paytech’s stake has declined to 75 per cent from 100 per cent stake in Fino Payments Bank.

The company is the first payments bank to list. PayTM, which too has a payments bank license, is expected to launch its IPO soon.

Bulk of Fino Payments Bank revenues come from fee income and it follows an asset-lite model. It offers services like remittances, micro-ATM, business correspondent (BC) banking, Aadhaar Enabled Payment System (AEPS) and third party products distribution.

In FY21, Fino Payments Bank reported gross revenues of Rs 780 crore and net profit of Rs 20.5 crore.