Fino Payments Bank Limited

Fino Payments Bank Limited incorporated in 2017, is a fintech company offering a diverse range of financial products and services that are primarily digital and have payments focus. It operates an asset light business model that principally relies on fee and commission-based income generated from its merchant network and strategic commercial relationships. The company’s merchants facilitate them in cross-selling their other financial products and services such as third-party gold loans, insurance, bill payments and recharges. Fino Payments also manages a large BC (Business Correspondents) network on behalf of other banks.

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The company’s products and services include various current accounts and savings accounts (“CASA”), issuance of debit card and related transactions, facilitating domestic remittances, open banking functionality (via our Application Programming Interface (“API”)), withdrawing and depositing cash (via micro-ATM or Aadhaar Enabled Payment System “AePS”) and cash management services (“CMS”). Its offers its products and services to its target market via a pan-India distribution network and proprietary technologies.

Promoters & Shareholding:

Fino PayTech Limited is the company promoters.

Pre Issue Share Holding100%
Post Issue Share Holding

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Public Issue Details:

Offer for sale: Fresh issue of approx. 5,199,306 equity shares of Rs. 1 aggregating up to Rs. 300 Cr and OFS of approx. 15,602,999 equity shares aggregating up to Rs. 900.29 Cr.

Total IPO Size: Rs. 1,200.29 Cr.

Price band: Rs. 560 – Rs. 577.

Objective: To augmenting its Tier–I capital base to meet future capital requirement and meet the expenses in relation to the offer.

Bid qty: minimum of 25 shares (1 lot) for Rs. 14,425 and maximum of 13 lots.

Offer period: 29th Oct 2021 – 2nd Nov 2021.

Date of listing: 12th Nov 2021.

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  • Diverse product portfolio.
  • A technology focused business model with an advanced digital platform.
  • Professional and experienced management team.
  • An asset light and scalable business model.
  • Unique DTP (Distribution, Technology, Partnership) network that helps in better customer servicing.


  • Limited operating history as a Payments Bank.
  • The company has incurred losses in the FY19 and FY20 and has experienced negative cash flows in the past.
  • The banking and financing sector in India is highly competitive.
  • Its insurance coverage may be inadequate to cover claims if they incure substantial losses

Subscribe or avoid?

Sectorial outlook – The Indian digital payment space has seen extraordinary growth in the last few years. Retail digital payments forecast to grow at a 34% CAGR during financial year 2020 to financial year 2025 and this growth has been driven by multiple factors like launch of new payment products, increasing smartphone penetration, increasing mobile internet users driven by lower data charges and a strong push from the government in order to increase adoption of digital channels. Over the last decade, NPCI has launched various innovative products like UPI, National Electronic Toll Collection (NETC) and Bharat Bill Pay Service (BBPS), AePS and other retail payment and settlement systems to make it much more convenient to customers hence this is expected have positive impact on the company and its business.

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The financials (revenue and net profit) are shown in graph below:

Valuation – For the last 3 years average EPS has been negative hence PE is not relevant. On the upper price band of Rs 577 and EPS of Rs 2.62 for FY21, the P/E ratio works out to be 220x. Its listed peers are AU Small Finance Bank Ltd (highest P/E), RBL Bank Ltd (lowest P/E). Since the company is asking P/E for 2021 is around 220x the listing seems to be very expensive.

Recommendation – Considering all the above factors, we recommend Investors to “AVOID” this IPO.


This article should not be construed as investment advise, please consult your Investment Adviser before making any sound investment decision. If you do not have one visit now.

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