Vishwanathan Mavila Nair is the Chairman and Non-executive Director of the Company. He has been associated with the Company since November 22, 2018. He holds a bachelor’s degree in science from University of Mysore. He has 48 years of experience in financial services and advising fintech start-ups. He has previously served as the non-executive chairman of SWIFT India Domestic Services Private Limited, an independent director on the board of directors of Stock Holding Corporation of India Limited and Encore Asset Reconstruction Company Private Limited, as the chairman and managing director of Union Bank of India, and as the chairman and managing director of Dena Bank. Venkata Satya Naga Sreekanth Nadella is a Managing Director and CEO of the Company. He has been associated with the Company since June 28, 2018. He holds a bachelor’s degree in commerce from Osmania University and is an associate member of the Institute of Chartered Accountants of India. He has over 20 years of experience and was previously associated with Accenture Services Private Limited as managing director, IBM Global Services India Private Limited as transformation manager, Capita Offshore Services Private Limited as transition manager, Callhealth Services Private Limited as chief operating officer and Indian School of Business as their finance manager. Sandeep Achyut Naik is a Non-executive Nominee Director of the Company. He has been associated with the Company since November 16, 2018. He holds a bachelor’s degree in engineering (instrumentation engineering) from Vivekanand Education Society’s Institute of Technology, University of Bombay, and a master’s degree in science (biomedical engineering) from School of Engineering, Virginia Commonwealth University, Virginia and a master’s degree in business administration from the Wharton School, University of Pennsylvania. He has over 16 years of experience in operations in India and Asia Pacific. He is the managing director and head of General Atlantic’s business in India and Asia Pacific and is also a member of the management committee of General Atlantic. He was selected as a Young Global Leader by World Economic Forum in 2010 and is currently a member of the alumni community of ‘The Forum of Young Global Leaders’. Previously, he served as a partner, co-head for India, for India Advisers Private Limited and as a principal at Apax Partners, L.P. Prior to joining Apax Partners, he worked at Medtronic Inc. and a summer associate with McKinsey & Company, Inc., United Sates.

A) Balance Sheet of Kfin Tech IPO

Particulars (Fig. In Cr)	2022	2021	2020
PPE	34	29	34
Share Capital	644	346	410
Debt (Long-Term+ Short Term)	123	346	375
Inventory	-	-	-
Trade Receivables	113	111	83
Trade Payables	25	25	20
Working Capital	177	125	51
Receivables days	64	84	67
Inventory Days	-	-	-
Creditor Days	-	-	-
Cash Conversion Cycle

B) P&L of Kfin Tech IPO

Particulars (Fig. in Cr)	2022	2021	2020
Revenue From Operations	640	481	450
Employees benefit Expense	232	189	194
Other Expenses	119	80	97
EBITDA	289	212	159
OPM%	45.16%	44.07%	35.33%
Other Income	6	5	5
Depreciation	37	98	92
Finance Cost	53	52	53
PBT	205	67	19
Tax	55	132	14
PAT	150	-65	5
No. of Shares	16.75	16.75	16.75
EPS	8.96	-3.88	0.30

C) Cash-Flow Statement of Kfin Tech IPO

Particulars (Fig. In Cr)	FY 2022	FY 2021	FY2020
PBT	204	68	19
Cash Stuck in Working Capital	-8	-10	-37
Cash Flow From Operations	253	205	101
CFO/PBT	124.02%	301.47%	531.58%
Capex Done	-20	-6	-5
Raise Cash from Debt	-	-	-
Debt Repaid	-	-	-
Raise Cash from Equity	310	-	-
Cash in Hand	45	23	12

D) Ratio Analysis of Kfin Tech IPO

Particulars	2022	2021	2020
Gross Margins	NA	NA	NA
EBITDA margins	45.16%%	44.07%	35.33%
NPM	23.22%	-13.37%	1.10%
D/E	0.19	1.00	0.91
Interest Coverage Ratio	5.45	4.08	3
Current Ratio	2.73	2.00	1.62
Asset Turnover	20	15	-
ROE	23.29%	-18.79%	1.22%
ROCE	31.00%	26.50%	20.00%

A) Kfin Tech Financial Analysis

Particulars (in Cr)	2022	2021	2020
Revenue from Operations	645	486	455
3 year CAGR growth	12.20%
EBITDA	294	218	164
3 year EBITDA growth	21.24%
OPM	45.58%	44.86%	36.04%
PAT	148	-64	4
3 year PAT growth	229.24%
NPM	22.95%	-13.17%	0.88%
No. of Shares	16.75	16.75	16.75
EPS	9	-4	0
P/E	41.4	-95.8	1532.6

B) CAMS Financial Analysis (Peer)

Particulars	2022	2021	2020
Revenue from Operations	864	674	661
3 year CAGR growth	9.24%
EBITDA	369	247	239
3 year EBITDA growth	15.41%
OPM	42.71%	36.65%	36.16%
PAT	289	218	164
3 year PAT growth	20.56%
NPM	33.45%	32.34%	24.81%
No. of Shares	4.9	4.9	4.9
EPS	59	44	33
P/E	37.3	49.4	65.7

 

Review and Recommendation of Kfintech IPO by IZ team is 4/10 Kfin Tech has an end-to-end transaction management platform across multiple asset classes such as mutual fund, direct stock investments, alternate investment funds, wealth and pension across India, Malaysia, Philippines and Hong Kong. With the help of Kfin tech softwares clients can manage Account setup, Customer Communication, Mutual Fund Units Allocation, Brokerage Calculations, Regulatory Compliances, MIS Report generations etc. The revenue of the company has increased from 450 Crores in Fy20 to 640 Crores in Fy22 representing a CAGR growth of 12%. EBITDA has also increased from 164 Crores in Fy20 to 294 Crores in Fy22 representing a CAGR growth of 21%. The growth is more in EBITDA as compared to Revenue as Employee/Revenue ratio has decreased from 42% in Fy20 to 35% in Fy22 as company is scaling the business. PBT has also increased from 18 Crores in FY20 to 204 Crores. PAT is negative in FY21 due to deferred tax liability of 129 Crores which will be paid from next year. In the last 3 years, total cash generated from operations are 557 Crores. ~85 Crores cash is gone in purchasing PPE and Intangible Assets, Investment of ~80 Crores in Mutual Funds, ~400 Crores is paid for repayment of NCDs. So, in Nutshell, the company total cash has increased from 11 Crores in Fy21 to just 45 Crores in Fy22. What is Negative in KfinTech? Kfin Tech we think due to group liability has raised NCD of 400 CR on its book and just now fully paid back in 2022. Due to this, despite generating ~550 Crores of cash from operations in last 3 years , at the end of Fy22 they have just 45 crores of cash on books. On the other hand, CAMS, has generated 725 Crores of cash flow from operations..... And, out of this ~500 Crores of dividend is paid to shareholders. So, clear difference is seen who is ahead in serving Shareholders interest and who is serving group liabilties. Valuation: Valuation wise also KfinTech looks on higher side.

KFin Technologies Limited Selenium, Tower B, Plot No- 31 & 32, Financial District, Nanakramguda, Serilingampally, Hyderabad, Rangareddi – 500032, Telangana Phone: +91 40 7961 5565 Email: compliance.corp@kfintech.com Website: http://www.kfintech.com/