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ICICI Securities Report
Fino Payments Bank Ltd., after spending its first few years (as a payment bank) in building a distribution network, customer base and product offerings, is now gearing up for sweating its infrastructure and monetising its strong customer base of 8.3 million and merchant network of 1.4 million as of June 2023.
To enhance its product offerings (removal of current account and savings account balance per customer of Rs 0.2 million and opening up of lending avenues), Fino is planning to apply for small finance bank licence and the entire process is likely to take 18-24 months, subject to regulatory approval.
Fino would try to build differentiated SFB – led by technology and continuous focus on asset-light business approach with negligible cost and capital requirement to rollout the SFB operation, if granted licence.
Maintain 'Buy' with a revised target price of Rs 425 (Rs 350 earlier), valuing the stock at 30 times price/earning (earlier: 25 times) on superior execution of scaling liability franchise.
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