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Industry : FINANCE/NBFC

Kfin Technologies View all IPOs

Price Band

Rs. 347 - Rs. 366

KFIN TECHNOLOGIES is going public with an Offer for Sale. The issue opens on 19th December 2022.

MOJO CALL

Why

Avoid

MOJO CALL

Avoid

Neutral

Karvy Group Promoters Own 14.2%

The Karvy Group faced regulatory issues with various government agencies.
C Parthasarathy, the founder of Karvy, owns 14.12% of the company.
Any adverse comments about the Group could affect KFin's brand equity, and these shares could enter the market, affecting the share price.

Last year, Kotak Mahindra Bank Acquired Stake at Rs. 185 Per Share

In November 2021, Kotak Mahindra Bank acquired a 9.86% stake in the company for a price of Rs. 185 per share.
However, 12 months down the line, an offer for sale has been made at Rs. 347-366 per share.

Rich Valuations

KFinTech has a 32% market share in overall AAUM, while CAMS, another listed company, is the market leader.
CAMS commands a P/E of 39x (TTM), whereas KFin is asking for a P/E of 35x (annualising first six months of the FY2023).
Due to its market leadership and larger market share, CAMS should always command a higher P/E than KFin.
This eliminates the possibility of capital appreciation.

Issue Details

Issue Opens	19th December 2022
Issue Closes	21st December 2022
Price Band	Rs. 347 - Rs. 366
Issue size (Upper Band)	Rs. 1500 Cr
Issue Type	OFFER FOR SALE
Market cap (based on upper band)	6133 Cr
Sales- March 2022 (Rs./Crs)	646
Net Profit - March 2022 (Rs./Crs)	149
Industry	FINANCE/NBFC
Promoters	General Atlantic Singapore Fund Pte. Ltd.
Lead Manager	ICICI Securities Limited

Objective of the Issue

Details

The Objectives of the Offer are to:

1. To conduct the Offer For Sale of equity shares totaling Rs. 1500 Cr by the promoter selling shareholder.

2. To achieve the benefits of listing equity shares on stock exchanges.

List of Shareholders Selling Their Stake

NAME	TYPE	Number of Equity Shares for OFS	% of Total Offerings (OFS)
General Atlantic Singapore Fund PTE. LTD.	Promoter	40983606	100%

Business Operations

About Company

KFin Technology is a leading platform for technology-driven financial services.

It provides comprehensive services and solutions to India's capital market ecosystem, which includes asset managers and corporate issuers across asset classes.

The company also provides several investor solutions, including transaction origination and processing of mutual funds and private retirement schemes in Malaysia, the Philippines and Hong Kong.

The company serves 24 of India's 41 AMCs, accounting for 59% of the market share based on AMC clients.

Revenue from Operations
	Q2 FY23	FY22	FY21	FY20
Investor Solutions
Domestic Mutual Funds	68%	71%	66%	62%
International and Other Investor Solutions	9%	8%	8%	7%
Issuer Solutions	13%	12%	13%	11%
Global Business Services	7%	7%	9%	8%

Financials

Financial Overview

In Q2 FY23, the company reported a revenue of Rs. 354 crore and a net profit of Rs. 85 crore.

In FY22, the company reported a revenue of Rs. 646 crore and a net profit of Rs. 149 crore. The net profit increased substantially compared to the previous year, which reported losses of Rs 65 crore in FY21 and profits of only Rs 5 crore in FY20.

Through Q2 of FY23, the Return on Capital Employed (ROCE) and Return on Equity (ROE) were 20.71% and 24.72%, respectively.

Financial Performance (Rs/crore)

(Rs/cr)	Q1 FY23	FY 22	FY 21	FY 20
Sales	354	646	486	455
Net profit	85	149	-65	5