Fino Payments Bank will evaluate the option to convert to a small finance bank in the future but expansion of the payments ecosystem in the country will offer an immediate scope of growth for the bank, which is heading for its initial public offer on Friday.
The maiden offer, which includes fresh issuance of equity shares and an offer for sale by the promoter, has a price band of Rs 560-577 per equity share.
The IPO size at the upper band is around Rs 1,200 crore, comprising Rs 900 crore from an offer for sale of 1.56 crore shares and Rs 300 crore from fresh issue.
The net proceeds from the public issue is proposed to be used to augment the bank’s tier-1 capital base to meet its future capital requirements.
Managing director and CEO Rishi Gupta said that the bank has already garnered more than 2.6 million current and savings bank accounts and onboarded more than 6.4 lakh merchants since the bank was incorporated in April 2017.
“We are going to scale up with more merchant additions as well as getting more customers on board. Growth in the payments ecosystem itself will be a big driver for the next couple of years. Small finance bank is an option which is available and at a relevant point of time we will decide what to do with the option. But right now we are not focusing on conversion to a small finance bank,” said Gupta.
“The ATM network and the branch network are not growing because of high fixed costs. This augurs well for Fino because this gives an opportunity to spread ourselves in a very asset light and scalable model,” he said.
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 among 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 managers to the offer.
