AZB & Partners represented HAV3 Holdings in selling their entire stake in Fino Paytech (the promoter of Fino Payments Bank).
AZB’s deal team comprised our Partner Kunal Kumbhat, Counsel Himanshoo Tembe and Associate Anushka Mehta, with support from Associate Khushi Bafna on the closing; Partner Bharat V Budholia and Associate Malhar Desai on the CCI aspects; and Partners Nikunj Maheshwari and Nishanth Ravindran, along with Senior Associates Rashmee Kumar and Ankit Dutta on the due diligence aspects. Special thanks to our Senior Consultant Mr. Padmanabhan for his guidance on the banking aspects.
HAV3 Holdings has sold its entire stake in Fino PayTech, the promoter of Fino Payments Bank, to a group of new investors, including Alternatives Investment Managers, Infinity Alternatives Advisors, Merlin Holdings, and others. Fino Payments Bank, however, did not disclose the exact size of HAV3’s stake at the time of the transaction. According to Fino’s draft red herring prospectus (DRHP) from August 2021, HAV3 Holdings held an 11.48% stake in the bank.
The sale led to a 6% drop in Fino Payments Bank’s share price during intraday trading on September 19, 2024, when it reached INR 371.2 per share on the BSE. In its filing, Fino Payments Bank mentioned that HAV3 entered into a Deed of Accession to transfer its shares to the new investors.
Fino Payments Bank operates with an asset-light business model, primarily earning income through fees and commissions from its merchant network and commercial partnerships. The company has also expanded its product offerings, including referral loans in collaboration with partners that assess customer creditworthiness.
In its FY24 annual report, CEO Rishi Gupta highlighted the bank’s growing product portfolio, while CFO Ketan Merchant noted that the bank had applied for a small finance bank (SFB) license with the Reserve Bank of India. Fino plans to adopt a “Payments Bank++” model for its SFB, with fee-based income accounting for 75-80% of revenue in its early years.
For Q1 FY25, Fino Payments Bank reported a 30% increase in profit after tax (PAT), which rose to INR 24.27 crore from INR 18.7 crore in Q1 FY24. The company’s operating revenue for the quarter climbed by 25.4%, reaching INR 436.86 crore compared to INR 348.31 crore in the previous year.
Operating within India’s fast-growing fintech sector, Fino Payments Bank is well-positioned to tap into a market projected to become a $2.1 trillion opportunity by 2030.
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