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Below is quote on Fino Payments Bank IPO By Mr. Jyoti Roy - DVP- Equity Strategist, Angel One Ltd

Fino Payments Bank is coming out with an IPO of Rs. 1,174-1,200 crore at a price band of Rs. 560-577. The IPO will consist of an offer for sale of upto 1.56 crore shares and fresh issue of shares amounting to Rs 300 crores. The issue opens on 29th Oct 2021 and closes on 2nd Nov 2021. Fino payment Bank Ltd was incorporated in 2017 and offers a wide portfolio of digital financial products and services in India. It offers such products and services to target markets via a Pan-India distribution network and proprietary technologies, and since 2017, it has grown its operational presence to cover over 90% of districts as of September 30, 2021. It operates an asset light business model that principally relies on fee and commission based income generated from merchant networks and strategic commercial relationships.

Fino payments bank has posted a 46.0% CAGR in total revenues between FY2019-21 and has also turned around its operations and reported profits of Rs. 20 crore for the first time in FY2021. At the higher end of the price band the stock would be trading at P/E of 220x FY2021 fully diluted EPS of Rs. 2.6 which is expensive. Despite strong growth prospects, we believe that valuations do not justify the premium and hence we have a NEUTRAL recommendation to the IPO.

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