KFin Technologies makes listless debut; slips over 2% from issue price

Shares of KFin Technologies (KFIN) made a listless debut on Thursday, with the stock listed at Rs 369, up 1 per cent against its issue price of Rs 366 per share on the BSE. The stock opened at Rs 367, almost at par on the National Stock Exchange (NSE).

Post tepid listing, KFIN stock price fell below its issue price to a low of Rs 355 on the BSE and NSE. At 10:14 AM; the stock traded at Rs 356.85, down 2.5 per cent against its issue price. A combined 1.7 million equity shares had changed hands at the counter on the NSE and BSE.

KFIN is a leading technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem. KFIN is India’s largest investor solutions provider to Indian mutual funds, providing services to 24 out of 41 AMCs in India as of September 2022. KFIN had 59 per cent share in terms of client, as of end of Q2FY23.

KFIN’s value added services (VAS) have helped to increase wallet share with existing clients. Thus, the company intends to further deepen client relationship by offering multiple platform solutions. KFIN is a well-positioned player in the asset servicing platform business industry with high entry barriers. Long term client relationship, steady market share and healthy profitability provide a good investment opportunity, analysts at ICICI Securities said in IPO note.

Decline in growth and value of AAUM managed by clients. The substantial revenue from top client remains a concentration risk. Ongoing investigations against erstwhile promoter by enforcement agencies and significant disruptions in IT system and breach of data security are key risks and concerns, the brokerage firm said.

Prabhudas Lilladher Advisory Team in their IPO note said one can subscribe for long term as it is India’s largest investor solutions provider to Indian mutual funds, based on the number of AMC clients serviced. Company is providing services to 24 out of 41 AMCs in India, representing 59 per cent of the market share based on the number of AMC clients.

It is one of only two players of scale in India’s issuer solutions space where the company holds a 46 per cent market share based on the market capitalization of NSE 500 companies,” It also had a 40 per cent and 29 per cent market share based on the number of mainboard IPOs handled in FY’22 and H1FY’23, respectively. Through its acquisition of Hexagram, KFIN serves six AMCs in India on fund accounting. Kfin is servicing 301 funds of 192 asset managers in India representing 30 per cent market share based on the number of AIFs being serviced, the brokerage firm said.