ICICI Lombard is a joint venture between ICICI Bank and Canada-based Fairfax Financial Holdings Ltd. The company is the largest private-sector non-life insurer in India based on gross direct premium income in fiscal 2017. It was valued at Rs 20,300 crore as per the last deal.
The issue consists of offer for sale of up to 3,17,61,478 equity shares by promoter ICICI Bank, up to 5,44,85,709 shares by investor Fal Corporation. The issue also include a reservation of up to 43,12,359 equity shares for purchase by ICICI Bank shareholders.
Fino Paytech is set to soon launch payment bank in Maharashtra, Madhya Pradesh, Uttar Pradesh and Bihar with 400 branches in the initial phase with focus on areas having maximum domestic remittances to extend its banking services. Currently, only Airtel and India Post have started their payment bank operations.
With a target of opening 400 bank branches across 30 cities on its opening day, Fino will also provide the basic services of account opening and cash withdrawal in additional 15,000 access points outside these branches.
Fino will provide services like basic banking products such as withdrawal and deposits as well as third-party products like insurance and remittances while continuing to serve their primary responsibility of a technology-solution provider and banking correspondent (BC) to other banks.
Another 15,000 petrol pumps and liquified petroleum gas (LPG) outlets, where Fino already has a presence due to its partnership with Bharat Petroleum Corporation Ltd (BPCL), will also be incorporated in the exercise.
In order to supply the third-party products, Fino has tied up with a lot of companies. Our tie-up with BPCL will help enhance out our physical infrastructure and reach. We have also tied up with ICICI Bank as partner bank that allows to offer ICICI’s banking products to our customers, for insurance we have ICICI Prudential and Lombard and for international remittances we have tied up with Western Union, Express Money, Transfast etc.
Fino Paytech is one of the entities to have received an in-principle approval from the Reserve Bank of India (RBI). In 2015, 11 companies had received an in-principle approval from the RBI to offer payments bank services.
Of these, three—Cholamandalam Distribution Services, Sun Pharmaceuticals and Tech Mahindra—have surrendered their licences. The other entities—Aditya Birla Nuvo, National Securities Depository, Reliance Industries Ltd and Vodafone m-pesa— are also expected to roll out their services soon.
ICICI Lombard General Insurance Company is a joint venture between ICICI Bank and Fairfax Financial Holdings, a Canada based diversified financial services company engaged in general insurance, reinsurance, insurance claims management and investment management.
FINO PayTech intends its payments bank avatar to reach the unserved and underserved. Rishi Gupta, CEO & MD, of FINO PayTech believes his company’s track record in financial inclusion gives it an upper hand over other prospective payments banks.
In 2006, when the Reserve Bank of India (RBI) issued guidelines allowing banks to employ business correspondents (BCs), it not only gave them a strong tool to work with, it also empowered the largely marginalised customer. BCs could carry out a range of services and transactions on behalf of banks for a wider consumer base, getting a commission for this service.
FINO PayTech was incubated as such a BC by ICICI Bank in July 2006—with a seed capital of Rs 15 crore—out of Navi Mumbai. The acronym FINO stands for Financial Inclusion Network & Operations, and financial inclusion is what took this freshly-minted BC to the bustling Chandni Chowk market district of Old Delhi soon after.
Fresh from its first project of opening accounts for slum dwellers in Mumbai, on behalf of Union Bank of India, a FINO team had gone to Delhi to explore business opportunities.
A chartered accountant by profession, the 47-year-old Rishi Gupta was roped in by ICICI Bank as FINO’s chief financial officer and president (sales) in 2006. He came from a three-year stint at International Finance Corporation in New Delhi, having worked on budgeting and project finance. Manish Khera, a senior ICICI banker, had founded FINO and was CEO till he quit in 2013. He thereafter briefly worked at FINO’s now rival Airtel Payments Bank before taking up other entrepreneurship ventures.
FINO, along with 40 other firms, had applied to RBI for a payments bank licence and, last August, the central bank gave ‘in-principle’ approval to 11 companies, including FINO. It will now submit an application to the RBI for final approval—they have till March 2017 to set up the bank. They would need to disclose details of the payments bank’s equity structure, its investors, the head of the bank and a detailed business plan including rollout of operations.
It also has a strong roster of investors, including The Blackstone Group with a near 20 percent stake, ICICI Group (15 percent), Intel Capital, Headland Capital Partners, IFC, Indian Bank, Life Insurance Corporation of India (LIC), Union Bank of India and Corporation Bank. FINO has raised capital four times between 2007 and 2011.
Government-owned oil marketing company Bharat Petroleum Co Ltd (BPCL) has acquired 21% stake (on a fully diluted basis) of FINO Paytech for Rs 251 crore in an all-cash deal. The latter had acquired a licence for payments bank last year. This deal values FINO Paytech at around 1250 crores or aprox Rs 175 per share.
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Rishi Gupta, chief executive officer and managing director of Fino PayTech, said the partnership will be a win-win for both sides. The extensive reach of BPCL distribution allows Fino Payments Bank to substantially improve its reach, especially in rural India. On the other hand, BPCL will be able to offer a variety of payments bank products to its customers and partners.
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. Profitable since 2010, for the year 2014-15 Fino reported a gross revenue of Rs 219 crore and net profit of Rs 10 crore.