ICICI Securities has initiated coverage on recently listed Fino Payments Bank with buy rating. Saying the company has a unique business model and niche position in untapped rural India, brokerage sees an upside of 25% in this stock from CMP of Rs 382 per share. Shares of Fino Payments Bank gained nearly 2 per cent to Rs 391.50 per share in the early trade on Tuesday. At 12 pm, this banking sector share was trading with over 1per cent or Rs 3.85 gain to Rs 385.30. 

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"We initiate coverage on Fino Payments Bank (Fino) with BUY rating and TP of Rs475. Fino is uniquely positioned to capture growing opportunities in rural India, led by deep-rural products like MATM (~51% market share as on Aug’21) & AEPS, tailor-made CASA accounts for under-served population, and payment app called “FinoPay” targeting rural population, said the report.  

It said the company boasts of diversified revenue stream, merchant-led asset-light distribution model and deep rural network with operational presence in over 90% districts.  
"These key features of its unique business model will be the primary reason behind Fino turning profitable within 12 quarters," it said.  

ICICI Securities highlighted that, unlike other players, Fino is rapidly building organic customer base (~3.4mn) and merchant base (~0.8mn) without burning cash; annualised PAT margin stands at 4% with total annualised throughput of ~Rs1.7trn as on Sep’21. 

Another trigger to Fino Payments Bank stocks was RBI approving Fino Payments Bank's international money transfer service. On Monday, the bank informed that Fino Bank has received the RBI approval to commence the international remittance business under the Money Transfer Service Scheme (MTSS). The lender will undertake inward cross-border money transfer activities in association with an overseas principal, the details of which are being worked out.