Financial services platform, KFin Technologies, is set to launch its initial public offering (IPO) on December 19. The company intends to raise Rs 1,500 crore through this public offering consisting solely of an offer for sale led by promoter General Atlantic Singapore Fund Pte Ltd. The proceeds from the public issue will not go to the company. The bidding for the IPO will continue for three days- December 19, 20 and 21.
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In addition to 15 per cent reserved for high net-worth individuals (HNIs) and 10 per cent for retail investors, the company has set aside 75 per cent of the offer portion for qualified institutional buyers (QIBs). Before investing in KFin Technologies, one must take a few key factors into account.
-The price band for the IPO has been fixed at Rs 347 to 366 apiece.
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-KFin Technologies provides services to 25 out of the total 43 AMCs operation in the country. The company posted a profit of Rs 148.5 crore in FY 2022 with its revenue from operation growing over 33 per cent to Rs 639.5 crore compared to the corresponding period of the previous year. In FY 2021, the company had suffered a loss of Rs 64. 5 crores.
-The company has employed ICICI Securities, Kotak Mahindra Capital Company, JP Morgan India, IIFL Securities, and Jefferies India as merchant bankers for the issue
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-As a result of the company’s small customer base, its top five clients account for about 50 per cent of its total revenue. Losing just one or a few of these customers might be detrimental to the company’s operations and prospects.
-The promoters of the company are being investigated by the Enforcement Directorate (ED). Sreekanth Nadella, the company’s MD and CEO, was summoned in September. KFin Technologies was served with a freezing order, instructing shareholders Compar Estates and Agencies Private Limited, C. Parthasarathy- HUF, and Rajat Parthasarathy not to sell/ transfer/ create any liability concerning the company’s equity shares.
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Any investment decision should be made only after accounting for all the factors, including past performance, fundamentals and business opportunities for the company.
