Fino Payments Bank Receives RBI Approval for Cross Border Remittances

Fino Payments Bank (BSE: 543386; NSE: FINOPB) (“Fino Bank” or “the Bank” or “Fintech) has received the RBI approval for commencing International Remittance business under the Money Transfer Service Scheme (MTSS). The Bank will be undertaking inward cross-border money transfer activities in association with an Overseas Principal, the details of which are being worked out.

According to a recent World Bank release in November 2021, India is expected to be the largest recipient of remittances globally in 2021 with expected receipt of USD 87 billion. This is expected to grow by 3% in 2022 to USD 89.6 billion as a large number of workers are expected to return to the gulf countries.

The customer segment of Fino Bank at the middle of the pyramid is targeted to families of many of the people working in foreign countries. The money remitted by family members abroad can now be directly withdrawn at the nearest micro-ATM or Aadhaar-Enabled Payment Services (AEPS) enabled Fino Bank’s neighbourhood merchant point.

Major Ashish Ahuja, Chief Operating Officer, Fino Payments Bank said, “Continuous product innovation is one of the core pillars of our model. International remittance further enhances our transactions-based product offerings. We will be ready to offer the inward remittance services to our customers by Q1 FY23. In sync with our digital strategy to enhance customer experience, we will also look at having this product on our mobile application as well.”

Fino merchants provide services such as new account opening, cash deposit, money transfer, cash withdrawal via micro-ATMs or AEPS mechanisms, collect cash on behalf of various institutional clients among others. As a new offering International Remittance will help augment income of merchants and the Bank leading to strengthening of Fino’s robust distribution network.

“There is a major inward remittance corridor in states like Gujarat, Punjab, Kerala, Uttar Pradesh and Bihar. We already have scaled up our merchant presence in all these geographies. We are therefore confident that the new offering will gain traction very quickly. We also expect to shore up more subscription based saving accounts due to this initiative as customers would prefer to park the remitted money in a Fino Bank account itself”, added Mr. Major Ashish Ahuja.

Going forward Fino Bank will be open to partnering with more leading money transfer operators (MTOs) to widen its horizon across different countries. The Bank also has plans to commence outward remittance services soon. Fino Bank’s network of over 8 lakh merchants across the country, as of 30th September 2021, provide immense convenience to access domestic as well as cross border remittances.

In addition to International Remittance, the Bank has in the pipeline various cross sell offerings like mutual funds, loans, fixed deposits and others that are expected to contribute to its bottom line as part of its strategic vision of FY23 and beyond.

About Fino Payments Bank Ltd (www.finobank.com):

Fino Bank is a subsidiary of Fino Paytech Limited (“Fino PayTech”) which had last raised funds in 2017. Fino Paytech is backed by marquee investors like Bharat Petroleum, ICICI group, Blackstone, IFC, Intel and LIC among others. Frugal innovation is the key that has given the fintech a leadership position at the middle of the pyramid which primarily constitutes emerging India customers. It enjoyed a 55% market share in micro-ATMs in FY21. The Mumbai-based fintech operates on an asset light business model that principally relies on fee and commission based income generated from merchant network and strategic commercial relationships.

Fino Bank platform has facilitated more than 435 million transactions with a gross transaction value of Rs 1.33 lakh crore in financial year 2020-21. The fintech bank turned profitable in the fourth quarter of 2019-20 and has been profitable in subsequent quarterly periods. The Bank registered a profit of ₹20.5 crore in 2020-21.

In H1 FY22 the Bank earned revenue of Rs 448.39 crores as against Rs 330.53 crores in H1 FY21. During this period it also registered a Profit After Tax (PAT) of Rs 11.02 crores, a 73% increase on H1 FY21 profit.

Fino Payments Bank Limited’s Proposed Initial Public Offering

Mr. Rishi Gupta, Managing Director and Chief Executive Officer, Fino Payments Bank

• Price Band of ₹ 560 – ₹ 577 per equity share bearing face value of ₹ 10 each (“Equity Shares”).
• Bid/Offer Opening Date – Friday, October, 29 2021 and Bid/Offer Closing Date – Tuesday, November 02, 2021.
• Minimum Bid Lot is 25 Equity Shares and in multiples of 25 Equity Shares thereafter.
• The Floor Price is 56 times the face value of the Equity Shares and the Cap Price is 57.7 times the face value of the Equity Shares.

Fino Payments Bank Limited (the “Company”) is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to open its initial public offering of Equity Shares (the “Offer”) on Friday, October 29, 2021 and close on Tuesday, November 02, 2021. The price band for the Offer has been determined at ₹ 560 – ₹ 577 per Equity Share.

The Offer comprises of a fresh issuance of Equity Shares aggregating up to ₹ 3,000 million (“Fresh Issue”) and an offer for sale of up to 15,602,999 Equity Shares by Fino Paytech (the “Promoter Selling Shareholders”).

The Company intends to utilize the net proceeds from the fresh issue towards augmenting the bank's tier-1 capital base to meet its future capital requirements.

Fino payments bank is a wholly owned subsidiary of Fino Paytech Limited (FPL), primarily engaged in providing technology-based solutions and services related to financial inclusion. FPL is backed by marquee investors like Blackstone, ICICI Group, Intel Capital Corporation, Bharat Petroleum, HAV3 Holdings (Mauritius) Limited and World Bank Arm International Finance Corporation (IFC), amongst others.

Axis Capital Limited, CLSA India Private Limited, ICICI Securities Limited, and Nomura Financial Advisory and Securities (India) Private Limited are the book running lead manager to the Offer (“BRLM”).

The Company and the Selling Shareholder have, in consultation with the book running lead manager to the Offer, considered participation by Anchor Investors in accordance with the SEBI ICDR Regulations, whose participation shall be one Working Day prior to the Bid/Offer Opening Date, i.e. Thursday, October 28, 2021. The Offer is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended, read with Regulation 31 of the SEBI ICDR Regulations. The Offer is being made through the Book Building Process, in compliance with Regulation 6(2) of the SEBI ICDR Regulations, wherein not less than 75% of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders.

Disclaimers: 

FINO PAYMENTS BANK LIMITED is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public issue of its equity shares bearing face value of ₹ 10 each (“Equity Shares”) and has filed the RHP with the RoC and thereafter with SEBI and the Stock Exchanges. The RHP shall be available on the website of the SEBI at www.sebi.gov.in as well as on the websites of the BRLMs, i.e. Axis Capital Limited at www.axiscapital.co.in, CLSA India Private Limited at www.india.clsa.com, ICICI Securities Limited at www.icicisecurities.com and Nomura Financial Advisory and Securities (India) Private Limited at www.nomuraholdings.com/company/group/asia/india/index.html. Investors should note that investment in equity shares involves a high degree of risk. Potential investors should not rely on the Draft Red Herring Prospectus filed dated 30th July, 2021 with SEBI for making any investment decision. The Equity Shares offered in the Offer have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“U.S. Securities Act”), or any state law of the United States and, unless so registered, may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity Shares are being offered and sold (i) within the United States only to persons reasonably believed to be “qualified institutional buyers” (as defined in Rule 144A under the U.S. Securities Act) under Section 4(a) of the U.S. Securities Act, and (ii) outside the United States in “offshore transactions” in compliance with Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales are made. There will be no public offering of Equity Shares in the United States.

DISCLAIMER CLAUSE OF SECURITIES AND EXCHANGE BOARD OF INDIA (“SEBI”): (“SEBI”): SEBI only gives its observations on the offer documents and this does not constitute approval of either the Offer or the specified securities stated in the Offer Document.

DISCLAIMER CLAUSE OF BSE (Designated Stock Exchange): Exchange): It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the RHP has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the RHP..

DISCLAIMER CLAUSE OF NSE: NSE: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Offer Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Offer Document.

DISCLAIMER CLAUSE OF RBI: Our Bank has obtained a license authorizing us to carry on payments bank business from the Reserve Bank of India in terms of section 22 of the Banking Regulation Act, 1949. It must be distinctly understood, however, that in issuing the license, the Reserve Bank of India does not undertake any responsibility for the financial soundness of the Bank of for the correctness of any of the statements made or opinion expressed in this connection.

For further details in relation to the Company and Compliance Officer of the Company, please refer to statutory advertisement dated October 25, 2021

Fino Payments Bank Becomes The 1st Profitable Fintech To File for An IPO

The IPO size is likely to be of ₹1,300 cr and will include a fresh issue of ₹ 300 cr as well as an OFS component

Mumbai, 31 July 2021: Four years after starting operations as a payments bank, Blackstone, ICICI Group and BPCL backed Fino Payments Bank Limited (FPBL) has filed the draft documents with SEBI for an IPO. As per market sources, the IPO size is likely to be of ₹1,300 crores. The issue includes a fresh issue of ₹ 300 cr as well as an OFS component.

FPBL is a scheduled commercial bank serving the emerging India market with its digital based financial services. The company is a fully owned subsidiary of Fino Paytech Limited (FPL), a pioneer in technology enabled financial inclusion solutions. FPL is backed by marquee investors like Blackstone, ICICI Group, Bharat Petroleum and IFC, amongst others.

The fintech bank turned profitable in the fourth quarter of FY20 and has consistently enhanced its profitability since. This makes FPBL the first profitable fintech to file for an IPO.

Over the last few years, FPBL has witnessed a steep surge in transaction volumes on the back of digitization and proliferation of its banking points. As stated in the DRHP, in FY21 the payment bank’s platform has facilitated more than 434 million transactions having a gross transaction value of Rs 1.32 lakh crores. It has a strong leadership position in the fintech industry having the largest network of micro ATMs as of March 2021 with a market share of 55%, a robust merchant network of 6.4 lakhs and 25.7 lakh bank accounts.

Digital based transaction focused approach with no credit risk have enabled the growth of FPBL in times wherein the financial sector was looming over challenges. Its revenue for FY21 stood at ₹791 crores that grew at a CAGR of 29% in the last three years. The bank registered a profit of ₹20.5 crores in FY21 with an annual average ROE of 15%, the DRHP states.

Investment bankers appointed to the issue are Axis Capital Ltd, CLSA India Pvt Ltd, ICICI Securities Ltd and Nomura Financial Advisory Services Pvt Ltd