KFin Technologies IPO opens today: Here’s everything you need to know

The Rs 1,500 crore KFin Technologies IPO will be available for subscription till Wednesday, December 21, 2022, and the price band of the company has been fixed at Rs 347-366 per share.

The KFinTech IPO is entirely an offer-for-sale of up to Rs 1,500 crore by its promoter General Atlantic Singapore Fund and the company will not receive any proceeds from the issue.

Presently the promoter and promoter group hold a 74.37 per cent stake in KFin Technologies.

KFin Technologies is majority-owned by funds managed by private equity investor General Atlantic. Apart from it, Kotak Mahindra Bank owns a nearly 10 per cent stake in KFinTech which it acquired in 2021.

Three-fourths of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.

KFin Technologies is a leading technology-driven financial services platform serving asset managers such as mutual funds, alternative investment funds (AIFs), wealth managers, pension funds and corporate issuers, as well as international clients in Southeast Asia and Hong Kong.

It is India’s largest investor solutions provider to mutual funds based on the number of asset management company (AMC) clients serviced as of September 2022. The firm provides services to 24 out of 41 AMCs in India, representing 59 per cent market share.

“In addition, we signed on two new AMCs that are yet to launch operations as on September 30, 2022. (Source: CRISIL Report) Further, through our acquisition of Hexagram, we serve six AMCs in India on fund accounting, of which, three are our existing AMC clients in India for investor solutions,” the company said in its red herring prospectus (RHP).

Investors who wish to subscribe to KFinTech IPO can bid in a lot of 40 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,640‬ to get a single lot of KFin Technologies. The shares will be listed on both BSE and NSE.

The applicants also must note that the cut-off time for UPI mandate acceptance is Wednesday, December 21, 2022, upto 5:00 pm, the last day of IPO bidding. Further bids with confirmed status of mandate amount blocked (RC100) shall be considered as valid applications and hence, investors are advised to submit their UPI applications in IPO well in advance to avoid any last minute technical/systemic constraints that may hamper their ability to participate in IPOs by successfully accepting the mandate.

ICICI Securities, Kotak Mahindra Capital, J.P. Morgan India, IIFL Securities and Jefferies India are the book-running lead managers to the offer while Bigshare Services is the registrar of the issue.

Before heading into the IPO, the wine producer and seller on Friday raised over Rs 675 crore (Rs 6,75,00,00,018.00) from 44 anchor investors in lieu of 1,84,42,623 equity shares at Rs 366 each, data from the stock exchanges showed.

The anchor investors include Goldman Sachs (Singapore), Morgan Stanley Asia (Singapore), Copthall Mauritius Investment, Citigroup Global Markets Mauritius, Pinebridge Global Funds and Pari Washington India Master Fund, Axis Mutual Fund (MF), Sundaram MF, Edelweiss MF and UTI MF among others.

Commenting on the KFin Technologies IPO, Prabhudas Lilladher Advisory Team said, “One can subscribe for long term as it is India’s largest investor solutions provider to Indian mutual funds, based on the number of AMC clients serviced. Company is providing services to 24 out of 41 AMCs in India, representing 59 per cent of the market share based on the number of AMC clients. It is one of only two players of scale in India’s issuer solutions space where the company holds a 46 per cent market share based on the market capitalization of NSE 500 companies. It also had a 40 per cent and 29 per cent market share based on the number of mainboard IPOs handled in FY22 and H1FY23, respectively. Through its acquisition of Hexagram, KFin serves six AMCs in India on fund accounting. KFin is servicing 301 funds of 192 asset managers in India representing 30 per cent market share based on the number of AIFs being serviced.”

Reliance Securities in its research report said, “KFin has transformed business into a financial technology driven platform-as-a-service model. The technology offering enables transaction lifecycle management combined with highly secure data collection, processing and storage. It processed 1.6 mn average daily transactions, including 1 mn systematic transactions like systematic investment plans (“SIPs”) per day and $3.2bn, average daily settlement for domestic mutual funds in six months ended. During FY22 and 1HFY23 it maintained an accuracy rate of above 99.5 per cent of all transactions processed, while adhering to the timelines as stipulated in agreements with clients. Based on FY22 earnings the company is valued at 41.3x P/E, and 9.7x EV/Sales. On positive note, the company is the largest investor solutions provider in India with diverse products and services base, huge market share and international presence. However, ongoing investigations for erstwhile promoters is an overhang. At current valuation, the issue appears fully priced, discounting all near- term positives and risk reward is not favorable.”