Fino Payments Bank is reportedly exploring options to merge with its holding company Fino Paytech, which is subject to approval from the Reserve Bank of India (RBI).
The reverse merger is expected to begin once Fino Payments Bank completes its initial public offering (IPO) by December this year, the Economic Times reported citing people familiar with the matter.
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The news comes shortly after the RBI approved the merger of small finance banks Equitas and Ujjivan.
Fino Payments Bank completes five years next year and some of its early investors could get partial exit through the IPO. The lender could also get rid of the holding company structure, the report said.
As per RBI’s regulations, a non-operative financial holding company that promotes a lender should have a 40% stake in it for the first five years since business commencement. The stake can be slashed to 15% over the course of a decade.
Last month, the lender filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India.
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By GlobalDataIt plans to raise approximately $178.08m (INR13bn) through its IPO, which includes $41.1m OFC components.
The book running lead managers for the IPO include Axis Capital, CLSA India, ICICI Securities and Nomura Financial Advisory Services.
Founded in 2017, the lender has 54 bank branches and 143 customer service points across India. It offers a variety of financial services such as savings and checking accounts, mobile banking, and payments.
Fino Payments Bank is backed by the likes of Blackstone, Bharat Petroleum, Intel, IFC and ICICI Bank and it first recorded profit in the fourth quarter of the financial year 2020.
