Fino Payments Bank: All you need to know!

Fino Payments Bank: All you need to know!

Last updated: 27 Oct, 2021 | 01:02 pm

Fino Payments Bank IPO last day to subscribe on 02.11.21

Fino Payments Bank Limited (Fino Bank) IPO opens for subscription on 29th October. The company is looking to raise up to Rs 1,200 crore through the public issue. Here are the details:

About the IPO

Fino Bank IPO Date: 29 October - 2 November 2021

Fino Bank IPO Price band: Rs 560 - Rs 577

Issue Size: Rs 1,174 - 1,200 crore (Fresh Issue of Equity shares aggregating up to Rs 300 crore and Offer for sale of 15,602,999 Equity shares)

Post Issue Implied Market Cap: Rs 4,669 – 4,801 crore

Reservation: QIB 75%, Retail - 10%, NII 15%

Employee Discount: NA

Bid lot: 25 shares, and in multiples of 25 shares

Objective of the issue

  • To meet the expenses concerning the offer
  • Augmenting Bank's Tier - 1 capital base to meet its future capital requirements

About Fino Payments Bank

  • The Fino Payments Bank was incorporated in 2007 and is one of the growing fintech companies in India that offers a portfolio of financial services and products.
  • As of September 2021, Fino bank has grown its operational presence to cover over 90% of districts.
  • Fino bank operates an asset-light business model using the phygital delivery model. The bank relies on its merchant network and other participants for the same.
  • Some of the major products and services offered by Fino Bank include Current accounts and Savings accounts (CASA), Issuance of debit cards and related transactions, Cash Management Services (CMS), Facilitating domestic remittances, etc.
  • The company generates its revenue from fees and commissions it charges merchant networks and strategic commercial relationships.
  • Fino Bank's main target is the Indian population that has a low level of financial literacy and not much access to technology. They also target people who have less access to basic banking services.
  • Fino Banks has built a pan-India presence with 724,671 merchants that mostly are located in Tier-2 and Tier-3 towns. They currently have approximately 17,430 active BCs across India. Additionally, they operate 54 branches and 130 Customer Service Points.

Fino Product Portfolio

Micro-ATMs - Micro-ATMs are handheld terminals that typically require a card to be swiped and depend on mobile phone internet connections. They are mostly used in geographies where it is not practical for banks to locate a physical branch. The bank takes a commission of 0.5% of the transaction amount or Rs 15, whichever is lower. 

AePS - For any transactions, AePS uses Aadhaar biometric authentication through fingerprint or demographic information, linked to the Aadhaar database. Commissions are the same as Micro-ATMs.

Remittances - Remittance predominantly refers to domestic transfers by migrant workers who send money from their location to their homes which is often in other states/regions. 

CASA - THe bank offers two types of current accounts and six types of savings accounts to its customers.

Debit cards - The bank offers its customer a Rupay debit card and earns by charging customers a one-time issuance fee and annual maintenance charge.

Cash Management Services - It includes cash collection services and cash payment services across traditional physical channels and helps digitize physical cash to clients who manage significant volumes of cash.

Peer comparison 

There are no listed peers of Fino Bank. However, there are many unlisted peers with whom we can compare the Fino Bank. Some of the peers of Fino Payment bank are Paytm Payments bank, India Post Payments Bank, Airtel Payments Bank and NSDL Payments bank.

  • In terms of deposits, the biggest share is with Paytm Payments bank with a deposit of Rs 3,450 crore. Fino Payments Bank is well below in the list with deposits of Rs 251 crore in FY20.
  • The capital adequacy ratio is 54.84%, below the bigger players like Paytm and India Post.
  • The net worth leader is India Post Payments Bank with a net worth of Rs 570 crore, while Fino Bank has a net worth of Rs 150 crore.
  • In terms of the value of the transaction at ATM and POS, Fino Bank is just below Paytm Payments Bank with the value of transactions at Rs 1,181 crore (April 2021 - August 2021) and Rs 1,712 crore in FY21.
  • Fino bank offers a maximum number of products compared to its peers.


  • The bank became profitable only in FY21 before which it was in losses.
  • The total income reported by Fino bank for FY19, FY20, and FY21 is Rs 371.12 crore, Rs 691.40 crore, and Rs 791.03 crore, respectively.
  • The company reported a loss of Rs 62.38 crore and Rs 32.04 crore in FY19 and FY20, respectively. In the last financial year, it reported a profit of Rs 20.47 crore.
  • The Earning Per Share (EPS) is on the lower side in the FY21 and stood at 2.62.
  • RoNW increased from -32.3% in FY19 to 14.6% in FY21.
  • Fino Bank has shown exceptional growth in gross transaction value - in the last three financial years the number increased from Rs 45,684.80 crore to Rs 132,930.69 crore.


Asset Light and Scalable Business model - Fino bank's merchant-led model does not require much capital for network expansion except for referral of third-party loan providers. They are able to service-wide pool of customers because of the well-established technology platform that they are improving every month.

Operational Expertise and experience - FINO, as a brand has over 14 years of experience. It benefits from the experience and expertise of its leaders in this time. They use this experience to understand how the digitization of their products and services can shape customer behavior into the future.

Positive social impact - They have the vision to benefit Indian society by bringing un-served and underserved populations into the mainstream banking system. They aim to improve their access to financial products and services and in turn quality of life.

Growth Potential

Leverage their current market position - They have substantial experience of operating in different markets and have a deep understanding of their customer’s needs. It will help them in their future growth plan such as providing CASA deposit accounts in rural and semi-urban areas and providing the entire range of payment and remittances related services across urban, semi-urban, and rural areas. 

High Growth products - The company continues to focus on the innovation that will help them create high growth and diversified products. The company intends to target high-growth products with high margins within its existing offering. They also plan to explore new and improved products, in each case with a focus on products offered through their channel. 

Expand and deepen the customer sourcing capabilities - Over the last three financial years and in the first quarter of FY22, Fino has acquired 696,513 new merchants across their network. They intend to continue expanding their network to drive deeper penetration and sustainable operations in these regions and communities.


Impact on fee and commission-based activities - The main source of revenue for Fino Bank is revenue from fees and commissions that they charge for its products and services. The charges depend on many factors that include both internal and external factors. If the company is not able to charge because of any factors (competitive factors in particular), it will impact the revenue and also their margins.

Rely on technology for sustainability and growth - The company relies extensively on its IT system and any weakness, disruption, or failure in such systems, or breach of data, could adversely affect its operations and reputation. Further, the company's success depends on its ability to innovate, upgrade and respond to new technological advances. 

Regulatory requirements - All the payments banks in India are subject to stringent regulatory requirements and prudential norms. If the company is not able to comply with such regulations and laws, it will affect the operation and hence the cash flow of the company.

INDmoney Analysis

Fino Payments Bank has reported a healthy 46% CAGR rise in its total income to Rs 791 crore from FY19 to FY21, aided by higher Non-Interest Income. The bank has also turned profitable in FY21. The bank’s return ratios RoE and RoA stood at 13.3% and 2% respectively as of FY21. These appear to be encouraging. 

At the higher end of the price band, Fino Payments Bank IPO is aggressively valued at 235 times FY21 earnings (on a post issue basis). However, given its niche position, the bank could command a steep valuation. The bank generates over 95% of its income through fees and commissions. 

Given the company’s strong topline growth, robust outlook due to digital payments opportunity, but steep valuations, investors who wish to take exposure to an upcoming novel fintech space could consider investing in this issue. However, given the aggressive valuations, the issue may not see high listing gains.