Commission, exchange and brokerage income contributes majority of revenues of Fino Payments Bank. It increased by 14.5% to Rs 770.77 crore in FY21 from Rs 673.27 crore in FY20. The increase was a result of an increase in transaction throughput from micro-ATM transactions, AePS transactions, CMS, and CASA accounts. The Issuer recorded PAT of Rs 20.47 crore turning profitable (net profitability) in the FY 21. There were net losses of Rs (32.04) crore and Rs (62.38) crore for FY20 and FY19 respectively. Net margins were 2.66%, (4.76%) and (17.72%) for FY 21, FY20 and FY19.
Return on net worth has been 14.6%, (21.90%), (32.30%) for FY21, FY20 and FY19 respectively.
|Commission, Brokerage income||200.19||770.77||673.27||351.97|
|EBITDA Margin (%)||5.59%||10.27%||-0.20%||-11.32%|
|Net profit margin(%)||1.56%||2.66%||-4.76%||-17.72%|
The Issue is priced at 360x with an annualized EPS of 0.40 as at the end of Q1FY22 at the upper band price of Rs 577 per share. The issue is exorbitantly priced. Price to book value is 29.29x at NAV of 19.70 as at the end of Q1FY22.
Bharat Pe, Bill Desk, Infibeam Avenues, Instamojo Technologies, Paytm, Mobikwik, Razor Pay are some of the peers of the Issuer among others.
India is in the midst of a digital revolution and the masses are adopting the digital payments method. Increased technology adoption can be seen among millennials with rising in the use of smartphones and internet penetration. There is a section of the population that is not covered by large financial institutions and this factor works in the favor of emerging Fintechs and NBFCs. Hence the digital payments providers have headroom for growth in the future.
Fino Payments has a network of 641,892 merchants, 17269 BCs (Business Correspondents), 249849 micro ATMs and 143 CSPs and 54 branches. The Issuer offers various financial products and has demonstrated profitability. These types of companies have to incur capex to build tech infrastructure and enhance their phygital delivery model. The company faces challenges in the form of competition from fast emerging fintechs, NBFCs, and sustainability of margins in the future. Taking into account all the positives and the challenges; one may invest for a long-term perspective.
Review By CA Priyanka Choudhary on 14th Oct 2021
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]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
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