As of February 25, 2025, Fino Payments Bank Ltd. (BSE: FINY) is trading at ₹227.95 per share. Current price of Fino Payments Bank share is almost 60% down from its IPO price. After the listing Fino Payments Bank share has never crossed its IPO price and still it’s in downward trend.
The company’s price-to-earnings (P/E) ratio stands at 20.2x, higher than the industry average of 11.0x, indicating a potential overvaluation compared to its peers.
Additionally, the price-to-book (P/B) ratio is 2.7x, compared to the sector average of 1.0x.
Why Fino Payments Bank share is falling ?
Fino Payments Bank’s share price has been experiencing a decline due to several factors:
- Financial Performance: In the September 2024 quarter, the bank reported flat results, with significant declines in key financial metrics. The Profit Before Depreciation, Interest, and Taxes (PBDIT) and Profit Before Tax Less Other Income (PBT LESS OI) were at their lowest, recording Rs -381.73 crore. Additionally, the Profit After Tax (PAT) fell by 7.8% to Rs 21.15 crore. These underwhelming results have raised concerns among investors about the bank’s profitability and growth prospects.
- Valuation Concerns: The bank’s valuation appears expensive, with a price-to-book value of 4.6 and a Return on Equity (ROE) of 13.9%. Despite generating a return of 28.47% over the past year, profits have only increased by 17.7%, leading to a Price/Earnings to Growth (PEG) ratio of 1.9. This disparity suggests that the stock may be overvalued relative to its earnings growth, prompting caution among investors.
These combined factors have contributed to the downward trend in Fino Payments Bank’s share price.
More About Fino Payments Bank
Fino Payments Bank is an Indian financial institution that provides banking services, primarily targeting underbanked and unbanked segments of society. It was launched in 2017 after receiving approval from the Reserve Bank of India (RBI). Fino Payments Bank is a subsidiary of Fino PayTech Limited and operates on a digital-first model with a focus on financial inclusion.
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Key Features of Fino Payments Bank:
- Basic Banking Services: Offers savings and current accounts with limited deposit amounts (as per RBI’s payments bank regulations).
- No Credit Services: Since it is a payments bank, it cannot provide loans or credit cards.
- Digital & Assisted Banking: Uses technology and partnerships with merchants (business correspondents) to provide banking services.
- Money Transfers: Supports domestic money transfers, NEFT, IMPS, and UPI-based transactions.
- Aadhaar-Enabled Services: Provides Aadhaar-linked banking services like withdrawals and subsidies.
- Prepaid Cards & Bill Payments: Facilitates bill payments, mobile recharges, and offers prepaid/debit cards in partnership with Rupay.
- Wide Network: Operates through a network of over 12,000+ banking outlets and partnerships across India.
Fino Payments Bank has demonstrated consistent financial growth over recent years. Below is a summary of its key financial metrics:
Fino Payments Bank Income Statement Highlights (in ₹ Crore):
| Fiscal Year Ending March | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Interest Earned | 19.96 | 20.25 | 35.63 | 94.86 | 150.05 |
| Other Income | 351.97 | 673.27 | 973.22 | 1,135.05 | 1,328.33 |
| Net Profit/(Loss) | (62.38) | (32.04) | 42.74 | 65.08 | 86.22 |
Note: Figures in parentheses indicate a loss.
Balance Sheet Highlights (in ₹ Crore):
| Fiscal Year Ending March | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Shareholders’ Funds | 130.07 | 150.55 | 479.83 | 552.55 | 643.17 |
| Deposits | 117.53 | 242.84 | 500.69 | 917.15 | 1,412.54 |
| Total Assets | 624.00 | 1,010.29 | 1,680.00 | 2,466.40 | 3,419.11 |
Fino Payments Bank Key Financial Ratios:
| Ratio Description | 2023 | 2024 |
|---|---|---|
| Return on Net Worth (%) | 12.01 | 13.73 |
| Capital Adequacy Ratio (%) | 86.05 | 74.50 |
| Earnings Per Share (₹) | 7.82 | 10.29 |
| Book Value Per Share (₹) | 65.10 | 75.46 |
These figures indicate Fino Payments Bank’s robust financial health, marked by increasing profitability, a strong capital base, and efficient asset utilization.
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Fino Payments Bank Promoter
Fino Payments Bank is primarily promoted by Fino Paytech Limited, which holds a 75% stake in the bank. The remaining 25% is held by public shareholders. Fino Paytech Limited was founded in 2006 by Manish Khera, an Indian banker and businessman. Khera served as the Chief Executive Officer and Managing Director of Fino Paytech, leading the company to service over 70 million customers across more than 50,000 Business Correspondent points during his tenure.
As of December 31, 2023, the shareholding pattern of Fino Payments Bank is as follows:
| Shareholder Category | Percentage Holding |
|---|---|
| Promoter & Promoter Group (Fino Paytech Limited) | 75.00% |
| Public Shareholding | 25.00% |
The public shareholding includes both institutional and non-institutional investors.
Regulatory Limitations (As a Payments Bank):
- Cannot accept deposits exceeding ₹2 lakh per customer.
- Cannot offer loans or advances.
- Must invest 75% of deposits in government securities.
Fino Payments Bank IPO
Fino Payments Bank went public in November 2021 with an IPO (Initial Public Offering) to raise capital for expansion.
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Fino Payments Bank, a fintech company established in 2017, launched its Initial Public Offering (IPO) in October 2021. The IPO opened on October 29, 2021, and closed on November 2, 2021, with a price band set between ₹560 and ₹577 per share.
The offering comprised a fresh issue of shares totaling ₹300 crore and an Offer for Sale (OFS) of 1,56,02,999 shares, amounting to ₹900 crore, bringing the total issue size to ₹1,200 crore. The primary objective of the fresh issue was to augment the bank’s Tier-I capital base to meet future capital requirements.
Upon closing, the IPO was subscribed 2.03 times, with significant interest from retail individual investors, whose portion was oversubscribed by 5.92 times. Qualified Institutional Buyers (QIBs) subscribed 1.65 times, while Non-Institutional Investors (NIIs) subscribed 21% of their allotted portion.
Fino Payments Bank Share Stock Market Listing:
Fino Payments Bank’s shares debuted on the stock exchange on November 12, 2021, opening at ₹548 on the BSE, which was below the IPO issue price. This listing marked the first instance of a payments bank entering the stock market.
Financially, the bank reported a net profit of ₹20.47 crore for the fiscal year 2020-2021, a turnaround from the net losses in the previous two fiscal years.
Fino Payments Bank operates an asset-light business model, leveraging a “phygital” delivery approach that combines physical and digital services. As of September 2021, the bank’s distribution network covered over 90% of India’s districts, aiming to provide financial services to underbanked and unbanked populations.