Fino Paytech Limited Unlisted Shares

(i) Fino Paytech, founded on July 13, 2006, is headquartered at Mumbai, with offices across India. It is a business and banking technology platform combined with an extensive services delivery channel, whose vision is to fulfill every financial service needs of its customers, and thus become their universally preferred choice.

(ii) Fino Paytech is an institutional investor-driven company owned by international and Indian investors. The company has emerged as a thought leader, innovator, and implementer of technology solutions for institutions like banks, micro-finance institutions, government entities, and insurance companies. As an alternate banking channel, Fino Paytech enables seamless end-to-end customer sourcing and servicing.

(iii) FINO PayTech Limited Group is primarily engaged in providing technology-based solutions and services related to financial inclusion. It is a business and banking technology platform combined with extensive services delivery channel. The Group includes a Non-Banking Financial Company – Non-Deposit Accepting or Holding Company (‘NBFC-ND’) registered with Reserve Bank of India (‘RBI’). It is engaged in providing finance to poor women in rural areas of India who are organized as Joint Liability Groups (‘JLG’). Group services institutions like banks, microfinance institutions, government entities, and insurance companies. The Group includes a Bank which offers services such as current and savings accounts, remittances, business correspondent, mobile banking, bill payments and third party financial products distribution. The Bank is engaged in providing various types of financial services to the rural, poor, and underserved and unserved classes to help them be economically self-reliant.

What Does This Company Do?

A) Customer Enrollment Solutions

(i) Fino Paytech has developed applications that can be used to effectively acquire micro customers.

(ii) Unlike a banking model that requires customers to physically visit a branch, Fino Paytech’s Customer Acquisition System allows customers to be enrolled/acquired at the convenience of their doorstep. This process is quicker and simpler for customers as well as banks, while at the same time, it retains the core essence of banking as well.

(iii) An enrollment station typically consists of a laptop connected to a web camera, a fingerprint scanner, and a signature pad (optional).

B) Hardware Solutions

(i) Fino Paytech provides a full suite of biometric products for enrollment, storage, and verification, while also maintaining all back-end system elements – thus enabling them to develop and offer exclusive financial inclusion applications.

(ii) This technology enables Fino Paytech’s clients to offer a rich variety of simple and accessible solutions with a whole range of products – including handheld devices, biometric smart cards, backend switches, and micro deposit machines.

C) Operation Solutions

The operations solutions team manages data messaging to churn out the required information for day-to-day planning and management of operations. The principals may either utilize some of the pre-designed reports by Fino Paytech or ask for customized reports.

D) Services

(i) Consultancy Service
(ii) Financial Literacy

To whom they serve?

A) Banks

(i) Joint Liability Group Loans- In the banking system, JLG is a lending model that enables a group of individuals (usually five) to take loans for income-generating activity by forming a group, wherein group members guarantee each others’ loans. FINO has been doing JLG lending on behalf of various banking partners and on its own books since 2008. FINO’s solution provides a platform to source and service customers for group-based micro-finance lending.

(ii) Recurring Deposit – Recurring deposits are an ideal way to invest small amounts of money every month and end up with a large kitty on maturity. Fino Paytech is the first and only entity to provide a recurring deposit for micro customers, which becomes a committed savings product for this customer segment.

(iii) Money Transfer – They provide a fast, reliable, and convenient platform to transfer money domestically from the remitter to the beneficiary via Intra-bank (home bank), Inter-bank (NEFT), and the IMPS facility.

B) Government

(i) MNREGA- The Fino Paytech provides cards that function on a pan-India basis. The cards can be used to make domestic payments across 50,000+ villages in the country. The usage of biometric technology has largely reduced the possibilities and instances of misuse and malpractices as far as payments to citizens are concerned.

(ii) Social Security Schemes- Many State Governments are using Fino Paytech architecture, based on fingerprint usage as validation,  across the country to deliver social security schemes to citizens. This has to lead to substantial savings in terms of resources for the government.

C) Insurance

Fino Paytech’s cutting-edge technological solution has become a game-changer in India’s health micro-insurance sector. The solution empowers insurance companies to reach out to customers at the bottom of the pyramid and cater to their particular financial needs, while at the same time maintain financial viability as well.

Rashtriya Swasthya Bima Yojana (RSBY) is a cashless national health insurance welfare scheme introduced by the Government of India. The objective of this scheme is to protect the Below Poverty Line (BPL) households from the financial liabilities arising from health setbacks involving hospitalization.

Fact: Fino Paytech has enrolled over 25 million families under the RSBY.

In 2016, they got a license for Payment Bank.

Promoters And Management:

1. Mr. Ashok Kini - Non-executive Chairman & Independent Director. 2. Dr. Anjana Grewal - Independent Director 3. Mr. Amit Jain - Nominee Director of Blackstone 4. Mr. Alok Gupta - Nominee Director of Hav 3 Holdings (Mauritius) Limited 5. Mr. Pramod Sharma - Nominee Director of Bharat Petroleum Corporation Limited

Company Business:

They get revenue from financing and payment banks operation. Moreover, FINO Paytech Ltd. is also charged the financial institution ongoing rental fees for space on their back-end system and for point-of-transaction terminals, annual maintenance fees for the terminals, new card issuance fees.

Shareholding Pattern:

( As of 31.03.2020)

Sr.no	Name of the Shareholder	No. of Shares	% of Holding
1	Bharat Petroleum Corporation Limited	28435423	28.89%
2	ICICI Prudential Life Insurance Company Limited	11328854	11.51%
3	Blackstone GPV Capital Partners (Mauritius)	7512207	7.63%
4	HAV 3 Holdings (Mauritius) Limited	7456993	7.58%
5	International Finance Corporation	6569567	6.68%
6	ICICI Bank Limited	57,50,000	5.84%
7	ICICI Lombard General Insurance Company Limited	5289194	5.37%
8	Intel Capital Corporation	4433449	4.50%
9	Exide Life Insurance Company Limited	2832213	2.83%
10	Life Insurance Corporation of India	22,50,000	2.29%
11	Indian Bank	22,50,000	2.29%
12	Union Bank	22,50,000	2.29%
13	Corporation Bank	22,50,000	2.29%

 

Financials of Fino Paytech Limited Unlisted Shares:

Standalone Financials (Crores)

Year	Revenue	Expense	PBT	PAT	Shares	EPS	NW	BV
2018	43	99	-56.1	-46.89	12.77436	-4.73	579	45
2019	53	49	3.8	-9.22	12.81176	-0.75	576	45
2020	64	55	8.3	7.67	12.82388	0.63	587	46

Subsidiary and Associates Performance (Crores)

Company	Revenue (19-20)	P/L(19-20)	Revenue(18-19)	P/L(18-19)	Revenue(17-18)	P/L(17-18)
Fino Finance Pvt. Limited	106	4.64	134.5	2.32	123	-42
Fino Trusteeship Services	0.6	0.42	0.31	0.21	0.066	0.052
Fino Payment Bank	691	-32	371.12	-62.38	230	-67.38
Fino Financial Services	Nil	0.0052	Nil	0.0043	Nil	0.0043

Consolidated Financials (Crores)

Year	Revenue	Expense	PBT	PAT	Shares	EPS	NW	BV	Debt
2018	376	552	-176	-167	9.86547	-16.8	335	34.24	330
2019	547	601	-53	-73	12.26175	-7.29	289	29.38	328
2020	852	872	-19	-20	12.27388	-2.03	217	22.00	240

UZ Review of 2018-19: The Fino-Paytech has shown excellent growth in the FY18-19 as compared to last year. The top-line has grown 1.45 times as compared to last year. The losses have almost halved to 76 Cr this year. Fino-Paytech is generating most of its revenue from Payment bank and Financing business. (i) In Financing, they give JLG loans between 10000 to 60000 at 23% interest rate. In MSME, they give loan between 1.5 Lakh to 15 Lakh and Individual Microloan between 50k to 1 lakh. (ii) In Payment banks, a maximum deposit of Rs.1 lakh can be done. They can issue debit cards but not credit cards. The Payment bank has to invest 75% of the deposit to RBI in the form of SLR  and 25% in current and fixed accounts in commercial banks. They get 6-7% interest on their deposit with RBI and Commerical banks and have to pay 4% to the depositors for their liability. So on average for a Rs. 1 lakh deposit with a payment bank, they get Rs. 2000-3000 per year. Recently, they have tied-up with Suryoda Small Finance Bank for a sweep account facility. This facility allows customers to seamlessly transfer balance in their account in excess of Rs 1 lakh to SSFB (partner bank) account. While this facility ensures RBI guidelines on Rs 1 lakh deposit limit for payments banks are adhered to, it also gives customers the safety of a bank account to park excess funds, which can be utilized whenever they need. The sweep account facility will be available across all the geographies where Fino Payments Bank has operations. Currently, the bank has a presence across 25 states, with a network of 425 banking outlets and over 75000 merchant points servicing close to a million customers. (iii) They have a tie-up with commercials banks to sell their financial products such as Mutual Funds, Insurance Products to get other income. The Fino-Payment bank has tie-up ICICI Lombard and Exide Life Insurance to sell insurance products Plus they also charge to customers while transferring funds. We at UnlistedZone feels that the company should come in profit in FY19-20 the way they have performed this year.  The company is expecting an IPO in 2022 to give exit to existing investors in the company. UZ Review of 2019-20 1. The company has shown revenue growth of 55% in FY19-20 as compared to last year. 2. On a consolidated basis, the loss has been reduced from 53 Crores to 19 Crores in FY19-20 which is good. On a standalone basis, the company has registered a profit of 7 Crores as compared to a loss of 9 Crores last year. 3. In FY19-20,  the Company had allotted 1,21,250 Equity Shares of Rs. 10 each to the employees/ex-employees of the Company/Subsidiaries who have exercised their ESOPs. As per our calculations, the per-share value of ESOP is around 76 per share. Fino-Paytech Annual Report 2019-20 Fino-Paytech Annual Report 2018-19 Fino-Paytech Annual Report 2017-18 Research Report on Fino-Paytech-07.09.2019 6MFY20 Performance Graphical representation of Financials of Fino Paytech Limited Unlisted Shares