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KFintech posted total revenues of Rs 353.76 crore for H1FY23 and PAT of Rs 85.35 crore for the same period. For FY22, income from operations increased by 33% to Rs 645.56 crore from Rs 486.20 crore in. The Issuer earned PAT of Rs 148.55 crore against a loss of Rs 64.51 crore in FY21. The increase is attributable to an increase in AUM based fees and an increase in revenue from sales of value added services for domestic mutual funds solutions. Also, there was increase in revenues from Issue solutions (IPO service) business.
EBITDA margins have been robust throughout the last three fiscals as can be seen in the table. Net margins have shown improvement in FY22 and in H1FY23.
Return on net worth has been 11.59% (H1FY23), 23.05% (FY22) respectively and Debt to Equity is 0.19x of equity as at the end of FY22.
Financials and Ratios | Amount in INR Crores | |||
H1FY23 | FY22 | FY 21 | FY 20 | |
Total revenue | 353.76 | 645.56 | 486.2 | 455.27 |
Revenue from operations | 348.77 | 639.51 | 481.14 | 449.87 |
PAT | 85.35 | 148.55 | -64.51 | 4.52 |
EBITDA | 138.5 | 293.91 | 217.45 | 164.02 |
Total Assets | 1114.81 | 1026.41 | 922.61 | 868.38 |
Net Cash from operating activities | 68.85 | 252.64 | 204.63 | 101.44 |
EBITDA Margin | 39.71% | 45.96% | 45.19% | 36.46% |
Net Margin | 24.47% | 23.23% | -13.41% | 1.00% |
The IPO is priced at 33.01x with annualized EPS of 10.18 for H1FY23 calculated at the upper price band of Rs 336. P/E is 35.59x when calculated with EPS of 9.44 for FY22. CAMS, its listed peer as per the RHP traded at P/E of 39.10 at the end of FY22. This indicates that the Issue is fully priced at the upper price band. Kfintech's P/BV is 8.74 as at the end of FY22 while CAMS has P/BV of 18.72x as at the end of FY22.
CAMS was listed in Oct 2020 at Rs 1518 against its issue price of Rs 1230 and is currently trading at Rs 2175 on 15th Dec 2022. The scrip has provided return of 17% on an annualized basis over its issue price.
Listed Peer Comparison | ||
Particulars | CAMS | Kfintech |
Face Value | 10 | 10 |
Revenue from operations (FY22 INR Crores) | 909.67 | 639.51 |
EBITDA margin | 44.27% | 45.96% |
Net Margin | 33.50% | 23.23% |
P/E | 39.37 | NA |
EPS | 58.73 | 9.44 |
NAV | 132.43 | 38.45 |
Return on net worth | 49.32 | 23.05 |
Debt to Equity | 0 | 0.17 |
Kfintech IPO (Rs 1500 crore) opens on 19th Dec- 21st Dec 2022 with a price band of 347-336 per share. Retail quota is 10% and investors can apply with minimum bid of 40 shares (Rs 14,640). Maximum lot size is 520 shares (Rs 1,90,320).The Issue is fully an OFS by promoter shareholder, General Atlantic Singapore Fund PTE Ltd (Rs 1500 crore) The Promoter Group currently holds 74.37% of shareholding of the Company and will hold 71.74% post issue. The Issue is expected to list on 29th Dec 2022.
The company provides SaaS based end-to-end transaction management, channel management, compliance solutions, data analytics and various other digital services to asset managers across segments, as well as outsourcing services for global players.
At end of September 2022, total AUM of mutual funds serviced by CAMS and KFintech stood at 69% and 31% respectively. However, in terms of number of AMCs serviced, KFintech is the largest investor solutions provider to mutual fund industry, providing services to 24 out of the 41 AMCs operating at end of September 2022, thereby accounting to 59% of the market in terms of clientele.
Review By CA Priyanka Choudhary on 15th Dec 2022
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
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