Subscribe to KFIN Technologies: Anand Rathi

Anand Rathi IPO report on KFIN Technologies

KFin Technologies are a leading technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem including asset managers and corporate issuers across asset classes in India and provide several investor solutions including transaction origination and processing for mutual funds and private retirement schemes in Malaysia, Philippines and Hong Kong, on account of the following: As on September 30, 2022, KFin Technologies is India’s largest investor solutions provider to Indian mutual funds, based on the 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. In addition, we signed on two new AMCs that are yet to launch operations as on September 30, 2022. Further, through their acquisition of Hexagram, they serve six AMCs in India on fund accounting, of which, three are existing AMC clients in India for investor solutions.

Valuation and Outlook

The company has asset-light business model with recurring revenue model, high operating leverage, profitability and cash generation. The company is available at the upper end of the IPO price band, it is offered at 41.3x its FY22 earnings with a market cap of Rs. 6,443.4 million. The valuation of the IPO appears to be reasonable when we compare with listed peers. The company has significant scope for growth, considering its diverse product profile and addition of new client base and bright prospects ahead, we recommend a “Subscribe” rating to this IPO.