“Fino Bank shares suffered from Paytm IPO debacle”

NEW DELHI : Mumbai-based Fino Payments Bank, which received a mixed response to its Initial Public Offering (IPO), enters credit, investment, digital gold and term deposit (FD) services through partnerships .

It has partnered with Suryoday Small Finance Bank to offer an automatic route to start a fixed deposit if a client’s savings account exceeds ??2 lakh. It has partnered with KreditBee (Finnovation Tech Solutions Pvt. Ltd) for consumer loans, MyShubhLife for merchant loans, Fisdom (Finwizard Technology Pvt. Ltd) for mutual funds and IIFL Finance Ltd for loans Golden. Fino has also worked for a long time with ICICI Bank Ltd for gold loans.

However, for FDs and digital gold products, the payment bank is awaiting regulatory approval.

With the services of the ICICI and the IIFL, it disburses gold loans of ??100 crore in a month. Consumer credit, still in the pilot phase, Fino received 27,000 requests for banknotes ??1,500 to 5,000. The average ticket size for a merchant loan is ??20,000-30,000.

“These are all lead generation segments, where we make 1 to 1.5% commission and where we give 60 to 70% to merchants,” said Rishi Gupta, managing director of Fino Payments Bank.

Coming late to the segments targeted by his rivals, Gupta said, “You can’t start everything together. First, I wanted to establish the payments and the liabilities. A year ago, digital transactions were barely 1% of my volume, but today they are at 10%. Our growth in digital is much higher than in physical. I realized that these are all relevant products for my (rural) customer segment. Our model is that we don’t want to do anything about the loss. These products are results-driven companies. ”

The parent company, Fino Paytech, was established in 2006 as a remittance and business correspondent company. Fino Payments Bank, which started operations in 2017, used the Fino network to offer banking services such as savings accounts and cash withdrawals.

In 2019, Fino Bank had a team of 4,000 employees and posted ??60 crore loss. After a drastic reduction in the number of employees to 2,800, it recorded a turnover of ??791 crore and a profit of ??20.4 crore in FY21.

“Our customer acquisition cost is almost zero, we take a machine and marketing charge from each merchant as an onboarding cost. The trader earns a commission on every transaction, ”Gupta said. “On the customer side, we are at 6,000 CASA (current account-savings account) every day. It is not a free account. We charge between ??150-450 per account annually, of which we donate ??30-50 to the merchant. ”

Fino Bank had 3.4 million customers and deposits worth ??301.62 crores in September 2021.

On November 12, shares of Fino Payments Bank made a tentative debut on the stock exchanges with the stock listing at a 5% discount to the issue price of ??577. He had raised ??1,200.29 crore through its public issue, which included a new issue of ??300 crore and a sale offer of ??900.29 crore by the promoter.

The Fino Bank share closed the day’s session at ??390 on Monday.

“I thought our list would grow, but it looks like after the PaytmIPO debacle we are also suffering because somewhere we were pummeled in the same category of payments,” Gupta said during the muted response on the day of the interview. ‘registration.

According to Gupta, Fino was unable to create his own identity. “We are strong in our category of consumers. Should we now create a brand from the point of view of the investor or the consumer? “, He asked.

“Some of the models in this ecosystem will only survive if they keep investing more money. Our model is not like that. We do not ship merchants and customers for free. Fino’s story will take at least two to three quarters for people to understand. We’re a company with consistent performance, we don’t have extreme ups and downs, we just keep doing what we’re doing, and it will be bigger and better, ”Gupta added.

Since the Reserve Bank of India (RBI) announced on-the-fly licensing for small financial banks, Fino has considered this option. However, although he is eligible to apply for the license in June 2022, Gupta is evaluating whether he wants to go for a small financing bank or a digital banking license.

Its S1FY22 turnover amounts to ??448.39 crores with ??11 crore of profit.

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