KFin Technologies is a leading technology-driven financial services platform provider. It was incorporated in 2017 and has shown good financial results in the past 3 years. It is launching its initial public offer (IPO) on 19 Dec. The IPO is an offer for sale and is expected to raise Rs.1500 crores. The IPO will close on 21 Dec.
KFin Technologies is the largest investor solutions provider for Indian AMCs (Asset management companies). The company provides comprehensive services and solutions to the capital market ecosystem including mutual funds(MFs), alternative investment funds (AIFs), wealth managers, pension fund managers and corporate issues. KFin Tech provides several investor solutions such as transaction origination and processing for mutual funds and private retirement schemes. Other than India they have a presence in Hongkong, Malaysia and the Philippines.
KFinTech provides SaaS-based end-to-end transaction management, channel management, compliance solutions, data analytics and various other digital services to asset managers across segments, as well as outsourcing services to global players.
In India, KFin controls over 50% of the market. Out of the 46 AMCs KFin services 27. They are the very first corporate registrar in India with over 600 listed and 3000 plus unlisted corporates as its clients. They are also one of the two players providing central record-keeping services to the National Pension System in India. Processing over 10 lakh transactions daily and managing 13 crore folios they are the backbone to the investors.
The CEO at KFinTech Sreekanth Nadella said, “ Our vision is to be the trusted technology partner to all financial service providers. As we expand our business to newer geographies and asset classes, we aim to provide end-to-end tech services to all types of financial institutions. We want to help financial service providers answer a critical question: How do we improve delivery of financial services and customer experiences using technology?”.
The lead managers of this issue are ICICI Securities Ltd., Kotak Mahindra Capital Co. Ltd., J.P. Morgan India Pvt. Ltd., IIFL Securities Ltd., and Jefferies India Pvt. Ltd., while Bigshare Services Pvt. Ltd. is the registrar of the issue. The issue is a complete offer on sale worth Rs.1500 crores. For the shares with a face value of Rs.10 the price band for the IPO has been fixed at Rs. 347 to Rs. 366 per share with a minimum lot size of 40 shares. The company has allocated 75% of the shares for Qualified Institutional Buyers (QIBs), 15% for Non Institutional investors (NNIs), and 10% for Retail investors. The shares on offer are approximately 40983607 and will be listed on the NSE and BSE after allotment.
On the financial front KFin has consistently done well. It recorded a total income of Rs.455.27 cr in the fiscal year 2020, Rs.486.20 cr in 2021 and Rs.645.56 cr in 2022. The net profit however was unstable in the year 2021 where it recorded a loss of Rs.64.51 cr. This was rectified in the year 2022 with a profit of Rs.148.55 cr. Going by the current financials the company is expected to grow in 2023 as well with a profit of Rs.180 cr or more. The price band fixed at Rs.347 to Rs.366 per share is a viable one.
KFinTech is backed by General Atlantic Singapore and it plans to release its stake with this offer on sale. General Atlantic holds nearly 74.94% of total equity capital, followed by Compar Estates and Agencies Private Limited with 10.99% and India’s third-largest private bank player Kotak Mahindra Bank holding 9.98% stake. All the shares offered in KFin Technologies IPO will be sold by General Atlantic. Although the complete offer is an offer on sale and no funds will be directed towards the expansion of the company, it still has several positives.
- It is the market leader in its category
- It has a well established global presence
- It has a dense client portfolio as it provides end – to – end solutions
- Its clients include the likes of Infosys, Axis AMC, BPI Investment Management, HUL and many more
- The company is highly scaleable as it provides digital solutions and does not need heavy assets
- Financially the company is on a steady path of growth
The CEO Sreekanth worte on Linkedin that “With an increasing overlap of technology and finance, techfins enhance the capabilities of financial service organizations and allow them to thrive in a more challenging operating environment brought about by the pandemic. I’m optimistic that the right financial services organization-Techfin partnership can incrementally disrupt the financial services ecosystem and deliver exemplary customer outcomes. The prospects have never looked brighter for all stakeholders!”.
Quick Facts About The IPO
| IPO Opening Date | 19 Dec 2022 |
| IPO Closing Date | 21 Dec 2022 |
| Face Value per Share | Rs.10 per Share |
| Lot Size | 40 Shares |
| Price Band | Rs. 347 to Rs. 366 |
| Issue Size | Rs. 1500 crores |
| Issue Type | Offer For Sale |
| Number of Shares on Offer | 40,983,607 shares |
| Allotment Date (tentative) | 28 Dec 2022 |
| Listing Date (tentative) | 29 Dec 2022 |
Disclaimer: The investments discussed or recommended in the market analysis, research reports, etc. may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and only after consulting such independent advisors as may be necessary.
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