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Fino Paytech Ltd: Revolutionizing Financial Inclusion and Digital Payments
Financial services provider Fino Ltd. is involved in a number of industries. A division of Fino Ltd, Fino Payments Bank Ltd provides a variety of financial services and products, including internet banking, savings accounts, loans, credit and debit cards, insurance, investments, and mortgages.
Company Overview
Financial services provider Fino Ltd. is involved in a number of industries. A division of Fino Ltd, Fino Payments Bank Ltd provides a variety of financial services and products, including internet banking, savings accounts, loans, credit and debit cards, insurance, investments, and mortgages. Another firm under Fino Ltd., Fino Paytech Ltd., is a fintech company that specialises in digital financial services and solutions with a particular focus on payments. Furthermore, FINO LIMITED is a corporation that can be found on the UK's Companies House website, which offers details about the company's registered office address, filing history, finances, and officials. In the banking industry, the firm is well-known for its branchless banking network and cutting-edge technological solutions.
Through its several businesses, Fino Ltd provides a range of financial services.
Bank Fino Payments Ltd.: With an emphasis on payments, this fintech business offers a wide range of digital financial services and products, such as savings accounts, loans, credit and debit cards, insurance, investments, mortgages, and online banking.
Services for firm Correspondents: Through its affiliated firm, FINO Fintech Foundation (FFF), Fino Paytech Limited, a division of Fino Ltd, provides business correspondent (BC) services. Through a pan-Indian network, these services allow banks to provide financial services like as savings, deposits, insurance, and remittance, to underserved rural communities. The biggest business correspondent in India, Fino Paytech, covers 499 districts and has a wide reach.
Fino Paytech Ltd is a company that specialises in offering cutting-edge technological solutions to banks, insurance companies, government agencies, and customers. its technology has been used in a number of government programmes, including Rashtriya Swasthya Bima Yojana (RSBY) and MNREGA, demonstrating its proficiency in providing smooth domestic payment services and signing up millions of households for health insurance plans.
Micro Customer Services: Fino Paytech Ltd.'s technological applications and sturdy hardware solutions, such as biometric verification and efficient backend administration, have helped it effectively acquire micro customers. These services, along with the company's alliances with significant financial institutions like ICICI Bank and LIC of India, have been credited with the company's success.
Business Model
Financial Services for MSMEs and Customers: Through a network of agents, Fino Paytech's business strategy is focused on offering financial services to Micro, Small, and Medium-Sized Enterprises (MSMEs) and consumers.
Technology Platform: The firm provides cutting-edge technology solutions for organisations such as banks, governments, and insurance organisations. It functions as a business and banking technology platform. Fino Paytech facilitates smooth end-to-end client sourcing and servicing by fusing technology with a broad channel of service delivery.
Financial Inclusion: By providing services to more than 600 million people who were unbanked previously, Fino Paytech aims to promote financial inclusion. The business has greatly expanded its clientele, reaching millions of people in rural areas with its technological solutions.
Fino Paytech makes money from a variety of sources, including transaction fees, yearly terminal maintenance costs, new card issue fees, and recurring leasing fees for space on their back-end system and point-of-sale terminals. The organisation wants to shift to recurrent income sources such as maintenance and transaction fees.
Market Segments
Fino Paytech presently serves 1,852 distinct blocks in 399 districts throughout 25 states in India, having installed over 29,480 point-of-transaction terminals to date.
These are some market segments of fino paytech :
Micro Customers market: For more than ten years, Fino Paytech has catered exclusively to the underbanked micro customer market, offering them financial services. The business has centred its business strategy around serving the requirements of micro clients because it recognises their significance.
MSMEs: Fino Paytech's business strategy is focused on offering financial services to MSMEs, with the goal of assisting these companies with their financial requirements via a network of agents. The business is essential in helping MSMEs with financial services and transactions.
Institutions: Fino Paytech provides technological solutions that facilitate financial inclusion for micro clients, catering to banks, microfinance institutions, government agencies, and insurance organisations. These institutional clients are included in the company's market segments, which provide them with all-inclusive financial solutions powered by technology.
Retail Financial Services: A few years ago, Fino Paytech launched under the FINO Money brand to join the retail financial services market. This programme directly targets low-income households by interacting with consumers via a retail network that operates in many Indian states. The company's retail network provides a range of financial services and products that are suited to the requirements of its intended clientele.
Industry Research
The digital banking landscape in India has seen a remarkable evolution with the emergence of digital banking platforms. These platforms offer a wide range of services, from mobile banking apps to online payment gateways, making it more convenient for customers to manage their finances. In a nation where smartphone adoption is quickly rising, digital banking systems are now essential to contemporary banking. They are not only providing easier access to financial services but also driving financial inclusion.
The average increase in lending to the MSME sector from January to November of 2022 was above 30.6%, which is exceptionally high. backed by the Union government's expanded Emergency Credit Linked Guarantee Scheme (ECLGS)
MSMEs' proportion of the industry's gross loan offtake increased from 17.7% in January 2020 to 23.7% in November 2022.
The banking industry reported deposits of almost $2.2 trillion and loans of about $1.67 trillion at the end of FY23, resulting in the highest credit-deposit ratio in the previous three years—75.8%.
Compared to FY22's 9.7% loan growth, scheduled commercial banks (SCBs) recorded strong credit growth of 15.4% in FY23—an 11-year high.
Personal loans, loans to the services sector, and loans to agriculture and related industries drove the expansion.
During FY 22, SCBs opened 4.6% more new bank branches. New branches that opened in Tier 4, Tier 5, and Tier 6 centres drove the expansion.
The NBFC sector's increasing prominence in the Indian financial system is demonstrated by the steady increase in NBFC loans relative to GDP.
From a peak of 7.2% in June 2021 to 5.9% in September 2022, the GNPA ratio of NBFCs shows a consistent improvement in asset quality. With a compound annual growth rate (CAGR) of more than 30%, the personal loan portfolio of NBFCs had the greatest growth during the previous four years, increasing its share of the entire loan portfolio to 31.2% in March 2023.
The amount of credit given by NBFCs has increased; as of September 2022, the total outstanding amount was INR 31.5 Lakh Cr. The industrial sector remained to get the most amount of loans from NBFCs' balance sheets, with retail, services, and agricultural coming in second and third. Mantri Pradhan Jan Dhan Yojana: The world's largest financial inclusion programme, "Jan Dhan Yojna," has assisted in enrolling 486+ million beneficiaries in new bank accounts, with 265+ million of those beneficiaries being ladies Plan for Foreign Banks to Establish Wholly Owned Subsidiaries (WOS) in India: In order to encourage international investments in the industry, the RBI released rules in 2013 enabling foreign banks operating in India to build up WOS. introduction of entirely digital, hassle-free Kisan Credit Card (KCC) loans NBFCs and other non-banking businesses using Aadhaar e-KYC authentication: Aadhaar Authentication Licences (KUA/sub-KUA) are now available to all NBFCs, payment system providers, and payment system users. Creation of Digital Banking Units: In 2022, 75 DBUs were declared in 75 national districts to honour 75 years of independence
Promoters & shareholding pattern
| Company | Holding |
|---|---|
| ICICI Lombard General Insurance Company Limited | 5.73% |
| ICICI Bank Limited | 9.09% |
| International Finance Corporation | 6.02% |
| HAV 3 Holdings ( Mauritius ) Limited | 6.83% |
| Blackstone GPV Capital Partners ( Mauritius ) | 6.88% |
| VI-B FDI Limited | 6.88% |
| ICICI Prudential Life Insurance Company Limited | 10.38% |
| Bharat Petroleum Corporation Limited | 26.81% |
Peer Comparison of Fino Paytech
|
Company |
Founded Year |
Funding |
Location |
Stage |
|
PayNearby |
2016 |
$2.24M |
Mumbai, India |
Seed |
|
WeRize |
2018 |
$27.5M |
Bengaluru, India |
Series A |
|
Dvara KGFS |
2008 |
$35.1M |
Chennai, India |
Series E |
|
Spice Money |
2000 |
$15.4M |
Noida, India |
Series B |
|
Sub-K |
2010 |
$13M |
Hyderabad, India |
Series C |
|
StoreKing |
2012 |
$37.5M |
Bengaluru, India |
Series B |
|
Hesa |
2012 |
$6.56M |
Hyderabad, India |
Seed |
|
Suvidhaa |
2007 |
$37.2M |
Mumbai, India |
Series C |
|
FingPay |
2016 |
$3.72M |
Mumbai, India |
Series A |
|
Go Payments |
2018 |
$860K |
Mumbai, India |
Seed |
Financials of Fino Paytech
Fino Bank opened around 740,000 bank accounts every quarter in FY 2022-23, processed 120.7 crore transactions, and had a monthly average of 570,000 users on FinoPay, showing a 360% growth over the previous fiscal year. Additionally, the bank had total deposits of 1,200 crore at the end of FY 2022-23 and opened 40,000 digital savings accounts from December 2022 onwards
Fino Bank, a part of Fino Paytech, demonstrated a robust financial performance throughout FY 2022-23. The bank's financial health was evident in its steady growth across various metrics. In Q1 FY 2022-23, Fino Bank reported revenues of 289.1 H Cr, representing a 40.2% year-on-year growth. The bank's EBITDA increased by 110.6% year-on-year, reaching 23.6 H Cr. The bank's profit after tax also showed a significant improvement, growing by 222.7% year-on-year to 10.1 H Cr.
Moving on to Q2 FY 2022-23, Fino Bank continued its positive trajectory. The bank's revenues increased by 25.3% year-on-year to 303.3 H Cr. EBITDA grew by 71.1% year-on-year, reaching 30.5 H Cr. The bank's profit after tax also saw a substantial increase, growing by 74.9% year-on-year to 13.8 H Cr.
In Q3 FY 2022-23, Fino Bank's financial health continued to improve. The bank's revenues grew by 14.2% year-on-year, reaching 314.1 H Cr. EBITDA increased by 50.2% year-on-year, reaching 38.9 H Cr. The bank's profit after tax also showed a growth of 35.5% year-on-year, reaching 19.1 H Cr.
Finally, in Q4 FY 2022-23, Fino Bank maintained its strong financial performance. The bank's revenues grew by 13.4% year-on-year, reaching 323.4 H Cr. EBITDA increased by 46.3% year-on-year, reaching 43.0 H Cr. The bank's profit after tax also showed a growth of 25.4% year-on-year, reaching 22.1 H Cr.
Throughout FY 2022-23, Fino Bank's financial health remained strong, with consistent growth in revenues, EBITDA, and profit after tax. The bank's EBITDA margin also showed improvement, increasing by 277 bps in Q1, 270 bps in Q2, 298 bps in Q3, and 300 bps in Q4. These results demonstrate Fino Bank's commitment to financial health and its ability to maintain a positive financial trajectory.
Current Market Demand of Fino Paytech Shares
Within hours of SEBI's approval last year, Fino Paytech's unlisted shares shot up 20% to Rs 380–400 in the market. Furthermore, upon approval of its payments bank IPO, the price of Fino Paytech's unlisted shares increased by 20%. Because of the company's development potential and financial performance, Fino Paytech's unlisted shares are seen as a promising investment option.
Conclusion
In 2023, the company's revenue growth rate was a strong 14.85%, demonstrating a notable increase in its financial performance. Fino Paytech is a renowned inventor, thought leader, and technological solution implementer for organisations such as governments, banks, and insurance organisations. With a broad channel of service delivery, the organisation functions as a business and banking technology platform, facilitating smooth end-to-end client sourcing and servicing. Fino Paytech's emphasis on innovation and technological solutions positions it well for future development and success in the financial services market.
In conclusion, Fino Paytech has shown a strong financial performance in FY 2022-23, with steady growth across various metrics. The company's IPO is a significant development, offering investors an opportunity to earn high returns before the company goes public. The current unlisted share price of Fino Paytech is ₹149.0.
I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.
I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.
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