KFin Technologies Limited, incorporated in the year 2017 is a renowned technologically-driven financial service platform. The company offers solutions and services for corporate issuers and asset management companies across asset classes across India and provides a range of options for investors, including transaction origination and management for mutual funds as well as private retirement plans in Malaysia and in the Philippines as well as Hong Kong on account of the following:
Their platforms, including KARISMA, KPRISM, KREATION, FINTRACKS, eAGM, and a number of others, significantly lower the total operating costs while accelerating business growth, investor satisfaction levels, and client value at the same time. KFintech provides all the services, such as Fund accounting and administration, Investor servicing (Transfer Agency), CRM system, Compliance, physical infrastructure (branches), etc., enabling a laser-like focus on investment management.
Their business wise clientele are also described below:
It is proposed that the Fresh Issue’s net proceeds be used as follows:
The KFin Technologies IPO’s bid period is from Dec 19, 2022, at 10:00 A.M., to Dec 21, 2022, at 5:00 P.M. UPI Mandate confirmation must be received by 5 PM on the day the issue closes.
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EBITDA– Earnings Before Interest Tax Depreciation & Amortization PAT – Profit After Tax
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KFin Technologies Limited is going to be one of the only 2 listed companies after its listing in the field of capital market ecosystem. As we already have seen that most of the AMC take its services and the list of its clientele already shared above.
If we check all the fundamental parameters and start with the chart of EBITDA, it simply depicts that the earnings are continuously increasing from past 2-3 years. Though profit is also increasing but we have seen a loss of 64.50 crs in the FY 2020 though earnings increased to almost 217 crs in FY 2020 from 164 crs in FY 2019 and that is majorly due to taxation and some legal expenditures though sales and earnings were good in FY 2020 also. Tax expense as per RHP was 13.9 crs in FY 2019 which rose to 132 crs in FY 2020 which again then dropped to 55.4 Crs. So, this factor may be neglected which reaching to any conclusion.
As per our chart 2, we can see continous increase in the Total Assets of the company which is accompanied with continous decrease in the Total Borrowings. Total debt reduced to 122.50 crs in FY 2021 as compared to 167.60 in FY 2020, which is major decrease from total borrowings of 375.40 crs in FY 2019, though share capital remain same. So this is in favour of the firm and depicting the growth of the company in the last 3 years.
Taking the EPS as 9.36 as per RHP till March 2022, PE ratio is 39.10 which is at par in comparison to the Industry PE of 39.37. This simply depicts that the IPO price is resonable still we cannot reach to any conclusion without considering other fundamental parameters.
RoNW of 29.99% & EBITDA margin of 45.5% as per RHP in comparison to CAMS RoNW of 49.32% is on the lower side and at par with the CAMS EBITDA margin of 47.6%. On comparing its own Pat Margin growth then it is on the growth path and it can be confirmed by checking the revenue from operations which is also steadily increasing on YOY basis. If we check the the PAT in the last six months till Sep 2022, it can be seen that the profit earned in the first half is almost equal to 854 crores which is almost 176 crores more than the profit earned will Sep 2021. This depicts that the company is on the high growth path.
So, looking at the current market scenario, we might not get good listing returns. However, for the listing gain grey market premium can be checked and can be applied on the second or third day.
But looking at the services offered by the firm and good fundamental parameters with only one listed competitor in the market, long term investment in this firm looks reasonably well. This firm is on the growth path and can fetch tremendous returns in the future. Since, the market condition is not good for now so it might loose out on the listing gain.