KFin Technologies IPO: All You Need To Know
KFin Technologies' IPO will open on Dec. 19 and is priced between Rs 347 and Rs 366 apiece.
General Atlantic promoted, KFin Technologies Ltd. will launch its initial public offering between Dec. 19 and Dec. 21.
The issue consists of an offer for the sale of 4.09 crore shares by the promoter group at a price band of Rs 347–366 apiece in the IPO. The size of the issue is Rs 1,500 crore. The promoters and the promoter group will hold 49.9% of the post-offer issued and paid-up equity share capital. The offer for sale comprises 24.46% of the post-offer equity capital in the IPO.
IPO Details
Duration: Dec. 19 to Dec. 21
Offer for sale: 4.09 crore shares.
Price band: Rs 347–366 per share.
Issue size: An offer for sale of Rs 1,500 crore.
Face value: Rs 10 apiece.
Lot size: 40 shares and multiples.
Listing on: BSE and NSE.
Lead managers: ICICI Securities, Kotak Mahindra Capital Company Ltd., and JP Morgan
Use of Proceeds
No proceeds from the IPO will come to the company.
Business
The company is a technology-driven financial services platform, providing comprehensive services and solutions to the Indian capital markets ecosystem, including asset managers and corporate issuers across asset classes in India.
It also provides several investor solutions, including transaction origination and processing for mutual funds and private retirement schemes in Malaysia, the Philippines, and Hong Kong.
It is the largest investor solutions provider to Indian mutual funds, based on the number of AMC clients serviced. It provides services to 24 out of 41 AMCs in India, as on Sept. 30, 2022, representing 59% of market share based on the number of AMC clients.
It also services the mutual fund through Hexagram, a company it recently bought. Hexagram does fund accounting for six AMCs in India, three of which are already clients.
It is the only investor and issuer solutions provider in India that offers services to asset managers such as mutual funds, alternative investment funds, wealth managers, and pension funds, as well as corporate issuers in India, besides servicing overseas clients in South East Asia and Hong Kong. It services 18 AMCs in Malaysia out of 60 AMCs.
It services 301 funds of 192 asset managers in India as on Sept. 30, 2022, representing 30% market share based on the number of AIFs being serviced. It is also one of the three operating central recordkeeping agencies, or CRAs, for the National Pension System.
It derives nearly 65% of its revenues from the domestic mutual fund business, where it earns fees on the basis of average assets under management. The blended fees for this business stood at 4 basis points. In contrast, other businesses have fixed fees.
Financials
Peer Comparison
It competes with Computer Age Management Services Ltd. among its listed peers in the Indian market.
Risk Factors
The erstwhile promoters are subject to ongoing investigations by enforcement agencies, including the Enforcement Directorate, the Ministry of Finance, and the central government. The outcome of such investigations may adversely impact the company and the market price of its equity shares.
Significant disruptions in information technology systems or breaches of data security could adversely affect the company's business and reputation.
A decline in the growth, value, and composition of assets under management of mutual funds managed by its clients may have an adverse impact on the company's average revenue earned from these mutual funds and may have a significant adverse impact on future revenue and profitability.
The past growth rates may not be indicative of future growth, and if it is unable to adapt to evolving market trends, manage growth, or execute strategies effectively, its business, financial condition, and results of operations may be adversely affected.
It is subject to periodic inspections by SEBI and PFRDA, pursuant to its registration as a registrar and transfer agent, and CRA, respectively. Non-compliance with observations made by SEBI and PFRDA during these inspections could expose the company to penalties and restrictions.
Its technology infrastructure, including disaster recovery sites, is reliant on the information technology systems of third-party providers and is concentrated in the southern regions of India. In the event of a disaster, its disaster recovery and business continuity plans may fail, which could result in the loss of client data and adversely interrupt operations.