Credit Saison of Japan and Temasek Holdings of Singapore are among leading investors engaged in talks with Fino Paytech to buy a significant minority stake, two people aware of the development said.
Fino has mandated Credit Suisse to manage the transaction and non-binding offers are expected to be placed in the next few weeks, the people cited above said on condition of anonymity. Fino Paytech operates payment bank and financial technology services businesses. Credit Saison is a financial services company while Temasek Holdings is Singapore’s sovereign wealth fund.
“The total deal size is close to Rs1,200 crore of which Rs300 crore will go towards infusion of primary capital in the firm while the remaining amount will be used towards providing exits to existing private equity investors which include Blackstone, Intel Capital and Headland Capital,” the first of the two people cited above said.
“IFC Capital is another existing investor but is undecided whether it will also sell its stake in the coming round,” this person added.
Emails sent to Blackstone, Intel Capital and Headland Capital were not answered. Emails sent to spokespersons for Fino Paytech, Temasek and Credit Suisse were not answered either. Credit Saison could not be reached for comments despite repeated attempts.
In January last year, Fino Paytech had raised around Rs400 crore by selling 10% stake to ICICI Prudential Life Insurance and ICICI Lombard General. The funds were raised for its soon-to-be-launched payments bank for which it received RB’s final approval in March that year. In July 2016, domestic oil major Bharat Petroleum Corp. Ltd acquired a 21% stake in Fino for Rs 251 crore.
Mint reported on 21 May that Fino Payments Bank has set expansion goals to increase its customer base across the country. The company also plans to raise to raise Rs300 crore by October-November. In an interview, Rishi Gupta, managing director and chief executive officer of Fino Payments Bank had said that the funds will mainly be used for new product development, digital initiatives, network expansion and product marketing.
The bank, according to Gupta, is in the process to add 100 branches to the existing 425 and 12,000 merchant points to the existing 25,000. Gupta had said Fino will soon shortlist merchant bankers for the new round of funding. Currently, Fino Payments Bank processes transactions worth Rs100 crore a day and plans to handle Rs200 crore by March next year. Fino, which was a remittance service provider, started operations as a payments bank in September last year.
Source: Mint