KFin Technologies Limited IPO

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i. KFin Technologies is a leading technology-driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem including asset managers and corporate issuers across asset classes in India and provide several investor solutions including transaction origination and processing for mutual funds and private retirement schemes in Malaysia, Philippines and Hong Kong.

ii. India’s largest investor solutions provider to Indian mutual funds, based on a number of AMC clients serviced. They are providing services to 24 out of 41 AMCs in India, as on September 30, 2022, representing 59% of the market share based on the number of AMC clients.

iii. They are 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.

iv. KFin Technologies is servicing 301 funds of 192 asset managers in India as on September 30, 2022, representing 30% market share based on the number of AIFs being serviced.

v. They are one of the three operating central record-keeping agencies (“CRAs”) for the National Pension System (“NPS”) in India as on September 30, 2022.

vi. Kfin Technologies processed 1.60 million average daily transactions, including 1.00 million systematic transactions like systematic investment plans (“SIPs”) per day and USD 3.20 billion (representing ₹ 239.03 billion) average daily settlement for domestic mutual funds in six months ended September 30, 2022.

Competitive Strengths
Scaled platform with a strong track record of growth and market leadership
ii. Diverse multi-asset servicing platform is well-positioned to benefit from strong growth across large markets in India and
iii. Unique “platform-as-a-service” business model providing comprehensive end-to-end solutions enabled by technology solutions developed in-house south East Asia

Objects of the KFin Technologies Limited IPO:

The company will not receive any proceeds from the Offer and all such proceeds will go to the Promoter Selling Shareholder.

KFin Technologies Limited IPO Details:

Open Date: Dec 19 2022
Close Date: Dec 21 2022
Total Shares: 40,983,607
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 1,500 Cr.
Lot Size: 40 Shares
Issue Price: ₹ 347-366 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 29 2022

Promoters And Management:

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.

Financials of KFin Technologies Limited IPO:

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%

Comparison With Peers:

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

Recommendation on KFin Technologies Limited IPO:

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.

Registrar of KFin Technologies Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

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 Websitehttp://www.kfintech.com/

Discussion on KFin Technologies Limited IPO:


    The KFin Tech IPO final subscription –

    Qualified Institutional Buyers 4.17 times
    Non- Institutional Investors 0.23 times
    Retail Individual Investors 1.31 times


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