About the company:
Incorporated in 2017, KFin Technologies Limited is a leading technology-driven financial services platform. The company provides services and solutions to asset managers and corporate issuers across asset classes in India and provides several investor solutions including transaction origination and processing for mutual funds and private retirement schemes in Malaysia, the Philippines and Hong Kong.
As on September 30, 2022, Company is India’s largest investor solutions provider to Indian mutual funds, based on number of AMC clients serviced. They are providing services to 24 out of 41 AMCs in India, as on September 30, 2022, representing 59% of market share based on the number of AMC clients. Also, they are servicing 301 funds of 192 asset managers in India as on September 30, 2022, representing 30% market share based on number of AIFs being serviced.

Services Provided by the Company:
KFIN Technologies Limited is a public limited company whose main business is of a ‘Registered Transfer Agent’ (RTA). An RTA is an agency that records and maintains a complete record of transaction of investors for the benefit of mutual fund houses or listed entities. More than 90% of the company’s revenue comes from registry services.
The company also acts as a mediator between investors and AMCs and generate various statements such as portfolio valuation statements, transaction details of a folio, KYC verification of investors etc.
And they also serve retail individual investors like you and me. They are the ones who are responsible for collection of applications from investors with respect to an issue, proper maintenance of applications and assisting the issuing company in terms of determining the basis of allotment of securities, finalizing the list of persons entitled to allotment of securities, processing and dispatching allotment letters and executing other related documents in respect of the issue.
They are also a Central Record Keeping Agency (CRA) for NPS. CRA is responsible for recordkeeping, administration and customer service functions for all NPS subscribers including receiving instructions from subscribers through the points of presence, transmitting such instructions to pension funds and effecting switching instructions received from subscribers.

The Objects of the Offer:
The Company will not receive any proceeds from the Offer and all the Offer Proceeds after deducting the Offer expenses and relevant taxes thereon, will be received by the Promoter Selling Shareholder.

Key Financials:

The financials of the company are depicting an overall good financial health of the company. The revenue is growing at a CAGR of 19.08%, EBITDA at a CAGR of 47.54%, and Net Profit at CAGR of 473.08%. Reduced depreciation and amortization expenses have contributed to a tremendous increase in the Net Profit of the company.

Valuation:
1) The IPO Price band is Rs.347 to Rs.366. PE based on Basic EPS is 109.58 for upper limit. PE based on Diluted EPS is 110.91 for upper limit. The stock is overvalued in comparison with the Industry PE ratio of 39.37.
2) NAV per share is Rs.43.96 on 30^th September 2022, which makes the P/B of 8.32 for upper price. The industry P/B is 16.10.

Key Risks:
1) The promoters of the company are subject to ongoing investigations by enforcement agencies, including Enforcement Directorate, Ministry of Finance, Government of India (“ED”) and the outcome of such investigations may adversely impact the company and the market price of the company’s Equity Shares.
2) The company acquired Karvy Computer Share Limited in a scheme of amalgamation dated 17^th November 2018 and accordingly all the criminal litigations initiated against Karvy Computershare Private Limited have been transferred to the company. Accordingly, any adverse outcome from these litigations can negatively affect the Company.

IPO Details:
1) The IPO will open for subscription on 19^th December 2022 and end on 21^st December 2022.
2) The IPO lot size is of 40 shares and a retail individual investor can apply for minimum 1 lot worth Rs.14,640 and maximum 40 lots worth Rs.190,320.
3) The entire issue of 40,983,607 shares worth Rs.15,000 million is an offer for sale issue.
4) 75% of the issue is reserved for QIB, 15% for HNI and 10% for Retail Individual Investors.
5) The GMP of KFIN Technologies is 3.01% at the time of releasing this blog.