Dec 19, 2022
By: bhakti.makwana@timesinternet.in
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The KFin Technologies IPO opens on December 19 and closes on December 21. The price band of the IPO is set at ₹347- 366 per share.
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The financial services platform plans to raise ₹1,500 crore through a complete offer for sale by one of the promoters, General Atlantic Singapore Fund. The company will not receive any proceeds from the IPO.
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KFin Technologies provides transaction origination and processing for mutual funds and private retirement schemes in Malaysia, Philippines and Hong Kong. It provides services and solutions to asset managers and corporate issuers across asset classes in India along with several investor solutions.
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KFin Technologies is the largest investor solutions provider to mutual funds in India. It provides services to 24 out of 41 AMCs in India.
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“The company has significant scope for growth, considering its diverse product profile and extensive client base. In addition, the company will maintain its operating margins at a sustainable level, resulting in healthy earnings and returns ratios. As a result, we recommend that KFIN Technologies IPO be rated ‘Neutral’,” says KRChoksey Research in a report.
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On the valuation front, it is trading at a price-to-earnings ratio of 40x FY22 earnings per share (EPS) which is expensive as compared to its peer, says a report by Religare Broking.
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Analysts say key risks for the company are outstanding legal proceedings against it as well as its promoters. In 2021, SEBI had initiated adjudication proceedings against the company for violation of unfair trade practices and slapped a fine of ₹1.5 crore.
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The grey market premium (GMP) of the company’s shares stood at ₹8 per share factoring in high valuation and slow growth in profitability. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.
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The company’s shares are scheduled to be allotted on December 26 and listed on December 29 on the BSE and NSE.
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