The company will be eyeing to raise Rs 1,500 crore via its primary offering, which is entirely an offer for sale (OFS) of up to 4.1 crore equity by its promoters General Atlantic Singapore Fund.
Brokerage firms have a mixed review on the company. A few suggest it is as a long term player citing its strong position in the duopoly market, whereas others suggest to keep off the issue citing rich valuations and complete OFS status.
One can subscribe for long term as it is India’s largest investor solutions provider to Indian mutual funds, based on the number of AMC clients serviced, said Prabhudas Lilladher Advisory Team.
“Company is providing services to 24 out of 41 AMCs in India, representing 59% of the market share based on the number of AMC clients,” it added. “It is one of only two players of scale in India’s issuer solutions space.”
On the Contrary,
Broking, which has an avoid rating for the issue, has cited legal matters against the erstwhile promoter and highly regulated environment, lower retail portions and entire OFS as the key risks for the company.
On the valuation front, it is trading at PE of 40x FY22 EPS which we believe is expensive as compared to its near peer, the brokerage firm said.”A few players contribute to the majority of its revenue,” it added.
KFin Technologies will be selling its share in the range of Rs 347-366 apiece with a lot size of 40 equity shares. The issue can be subscribed till Wednesday, December 21.
Incorporated in 2017, KFin Technologies is a leading technology-driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem.
It provides several investor solutions including transaction origination and processing for mutual funds and private retirement schemes in Malaysia, the Philippines and Hong Kong.
On a positive note, the company is the largest investor solutions provider in India with diverse products and services base, huge market share and international presence, said
Securities which has not rated the issue.
“However, ongoing investigations for erstwhile promoters is an overhang. At current valuation, the issue appears fully priced, discounting all near- term positives and risk reward is not favorable,” it added.
In FY 2021-22, KFin Technologies reported a net profit of Rs 148.55 crore with a total revenue of Rs 645.56 crore. It clocked a net profit at Rs 85.34 crore with a revenue at Rs 353.76 crore for the period ended on September 30, 2022.
The company has reserved 75% shares for qualified institutional buyers (QIBs), whereas 15% shares will be allocated to non-institutional investors (NIIs). Retail bidders will get the remaining 10% of the shares.
Sushil Finance said that at the higher price band, the IPO is priced at 39x at FY22 earnings. “On annualized, it is asking a P/E of around 36x. There is only listed peer Cams trading at P/E 39x and industry average P/E is 39x.”
KFintech’s IPO share price is fully priced. Based on current financials, the issue seems fully priced, it added. “Cash surplus investors can invest with a long-term horizon.”
, Capital Company, JP Morgan India, and Jefferies India are the book running lead managers of the issue, whereas Bigshare Services has been appointed as the registrar to the issue.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)