Payment technology solutions provider FINO PayTech is in advanced talks with a few investors. The funding is part of the Rs 400 crore primary capital it sought to raise in a transaction that will help it comply with regulatory norms to start operating as a payment bank, even as it is exploring a potential acquisition of a fin-tech company, said Rishi Gupta, managing director and chief executive officer, FINO PayTech.
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The Mumbai-based company is raising the remaining capital of about Rs 150 crore from at least three domestic strategic investors such as financial services and insurance firms, he said. The fundraising involves dilution of foreign stake from 75% currently to 49% to comply with the regulatory ownership requirement for the payment bank, Gupta said. The deal values the company at a post money valuation of about Rs 2000 crore ($307 million), indicating a significant rise of more than double of its valuation when it raised Rs 150 crore ($33 million) at a post-money valuation of $126 million in 2011.
At present, the company provides basic banking, direct benefit transfer (DBT) payments, remittances and other payment services for the unbanked rural and urban masses in partnership with banks and financial institutions. The payment banking licence would help it provide a range of financial offerings such as savings and term deposits, credit and insurance besides its existing set of basic banking and business correspondent services, he said.
Founded in 2006, FINO PayTech is a financial inclusion software solutions and services company. It has received funding from investors including Intel Capital, IFC, Headland Capital, Blackstone and ICICI Bank. It processes Rs 1,000 crore worth of transactions every month with a gross margin of 2-3%. It has around 30,000 transaction points, about 20,000 business correspondent agents across 28 states covering over 500 districts.
In 2012, it acquired the prepaid mobile payment business of erstwhile Nokia Mobile Payment Services in India for an undisclosed amount. The acquired firm was to focus on prepaid payment service offerings, such as money transfer, utility bill payment, mobile and DTH recharge, etc.
Two years before that, it acquired a non-deposit accepting NBFC and a microfinance institution Intrepid Leasing and Finance Pvt Ltd, which crossed Rs 500 crore in assets under management (AUM) last month. It expects a portfolio of Rs 750 crore as of March 2017 compared with Rs 351 crore in the previous financial year. The firm’s microfinance business is present across Uttar Pradesh, Madhya Pradesh, Bihar, Karnataka and Maharashtra.