Blackstone-backed Fino, Banyantree portfolio firm get all-clear for IPOs

 Blackstone-backed Fino, Banyantree portfolio firm get all-clear for IPOs

Indian lender Fino Payments Bank Ltd and a company that runs automotive dealerships and is backed by local private equity firm Banyantree have received regulatory approval to float their initial public offerings.

The Securities and Exchange Board of India (SEBI) issued its final observations on Fino Payments Bank’s IPO proposal on October 1, the capital markets regulator’s website shows.

Separately, it issued its final observations on the draft red herring prospectus of Banyantree-backed Popular Vehicles & Services Ltd on September 29. SEBI’s final observations are akin to approving the IPO proposals.

Popular Vehicles, one of the significant dealers of Maruti Suzuki cars, had filed its IPO papers in early August. The IPO comprises a fresh issue of shares to raise Rs 150 crore and an offer for sale by BanyanTree. The mid-market PE firm had invested in Popular Vehicles six years ago and is looking to fully exit via the IPO.

Fino Payments Bank had filed its draft prospectus with SEBI two months ago for the IPO that comprises a fresh issue of shares worth Rs 300 crore and a secondary market sale of 15.603 million shares by its parent Fino Paytech Ltd.

Fino Paytech is backed by private equity giant Blackstone Group, ICICI Bank, World Bank arm International Finance Corporation (IFC), and state-run refiner Bharat Petroleum Corporation Ltd (BPCL).

Fino Paytech owns 100% of the banking company. Its stake will dilute to 74-75% after the IPO. This will be in line with the Banking Regulation Act, which says no shareholder can exercise voting rights in excess of 26% of the total share capital of a bank.

Navi Mumbai-based Fino is looking to become the first payment bank in India to go public. The bank is targeting a valuation of as much as Rs 5,300 crore ($712 million). Its IPO size is pegged at Rs 1,200-1,300 crore ($161-174 million), two people in the know had previously told The Capital Quest.

The company aims to use the net fresh proceeds to augment its tier-1 capital base for future capital expenditure and capital requirements. The proceeds from the secondary share sale will go to Fino Paytech.

Axis Capital, CLSA India, ICICI Securities, and Nomura Financial Advisory and Securities (India) are managing the Fino IPO.

Sumit Upadhyaya

The Capital Quest