Kfin Technologies IPO guidance at Chanakyanipothi.com the oldest & most trusted Investment Website in India.

    kfin technologies ipo

    Points, you like to know before you apply

    Something about the company

    Kfin Technologies is a leading technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem, in India, Malaysia, Philippines and Hong Kong.

    About Strong business

    • As on January 31, 2022, it is India’s largest investor solutions provider to Indian mutual funds, based on number of AMC clients serviced. It is providing services to 25 out of 42 AMCs in India, as on January 31, 2022, representing 60% of market share.
    • As on January 31, 2022, it is the only investor and issuer solutions provider in India that offers services to asset managers such as mutual funds, alternative investment funds (“AIFs”), wealth managers and pension as well as corporate issuers in India, besides servicing overseas clients in South East Asia and Hong Kong.
    • It is servicing 270 funds of 157 asset managers in India as on January 31, 2022, representing 32% market share based on number of AIFs being serviced.
    • It is one of the two operating central record keeping agencies (“CRAs”) for the National Pension System (“NPS”) in India as on January 31, 2022.
    • As on January 31, 2022, out of the 60 AMCs in Malaysia across wholesale funds, unit trust funds and private retirement schemes as specified in the CRISIL Report, it is servicing 16 AMC clients in Malaysia in addition to three clients in Philippines and Hong Kong as on January 31, 2022. In addition, it has signed on two new AMCs in Malaysia and one AMC in Singapore that are yet to launch operations as on January 31, 2022.
    • It is the largest issuer solutions provider in India based on number of clients serviced, as on January 31, 2022. It is one of only two players of scale in India’s issuer solutions space where we hold a 43% market share based on the market capitalization of NSE 500 companies and a 34% market share based on number of clients serviced within NSE 500 companies, each as on January 31, 2022.

    What is the growth potential of the business

    CRISIL MI&A expects India to continue being a high savings economy at least over the next decade. CRISIL MI&A also expects the share of financial assets as a proportion of net household savings
    to increase over the next five years. The rise in financial assets is expected to further boost the financial investments under mutual funds (“MFs”), equity, pension schemes, insurance and alternate assets.
    Registrar and transfer agents are agencies that record and maintain a complete record of transaction of investors for the benefit of mutual fund houses or listed entities. In India, Computer Age Management Systems (“CAMS”), Kfin Technologies Limited (“KFintech”) and Link Intime are qualified RTAs (“QRTAs”) which are responsible for the various activities. Alongwith the growth in financial assets, the business of there 3 RTAs is expected to show strong upward trend.

    About the Issue
    One of the plus points of the IPO is its size. It is just Rs 1500 Cr. but Not so large offer for HNIs & RIIs. 
    NII (15 %) 2172291/ Rs. 225 Cr
    RII (10 %) 5068680/ Rs. 150 Cr
    With just 102459 forms, the retail portion will get oversubscribed one time.
    So, we expect reasonably huge oversubscription for this IPO & Due to such oversubscription, the interest costs for NIIs will shoot up and will push up grey market premium.
    Something about offer-price
    The company has earnings per Share of Rs. 9.44 during 2021-22. So, the shares are offered on PE multiples 38.77, which is very reasonable compared to growth potential of the business. Upper offer price/BV after IPO Ratio: 9.52 is very attractive. Because of fast growing financial sector, the business of this company has huge potential, and we believe the share of the company are offered at throw away price.  The way Computer Age Management has given strong returns, this company can also provide solid returns to its long-term investors.

    What is the thinking of Grey Market
    Due to raid on Dabba traders, the grey market activities are relatively standstill. The grey market shows very low GMP for this IPO; however, we suggest ignoring GMP at least for this IPO
    What you should do
    We expect strong response from the institutional investors. Maybe you may not get good returns on listing and yet we suggest applying with full force and when you get allotment, sit tight for 9 months to get bumper returns.

    One thought on “Kfin Technologies, Apply with full force

    Leave a Reply

    Your email address will not be published. Required fields are marked *