FINDI (FND) Indian ATM and Fintech business [Archive]

Rawz

06-01-2024, 09:08 AM

Here's one to look at over the weekend.. ill start it off:

FINDI mission (the story): Build a new digital India, by enabling financial inclusiveness for the underbanked.

FINDI is a micro-cap listed on the ASX under ticker FND and derives 100% of its income from majority owned and controlled TSI India (in the process of rebranding to Findi). FINDI could be the only 100% pure play Indian economy linked investment via the ASX. Current market cap is under $40m. FINDI is split into two divisions. The first and dominant is the deployment and management of ATMs. FINDI manage 20,500 ATMs currently. Each ATM generates $65k+ in cumulative FCFs (free cash flow) over the ATMs life (12 years). Initial capex per ATM is $12.2k which is paid back by the 3rd year. After the 3rd year the ATM is a highly profitable FCF generator. The IRR (internal rate of return) is a healthy 35%.

FINDI recently won two large contracts to deliver and manage brown label ATMs for State Bank of India (SBI) which goes out to 2033+ and Central Bank of India (CBI) (not to be confused with the reserve bank of India) to 2029+. These contracts guarantee strong revenues (assuming customers keep transacting via the ATMs) for the medium term. This lowers the risk of the investment in my eyes. Other contracts with large banks in India include, Punjab National Bank, HDFC Bank and Tamilnad Mercantile Bank.

The second division is FindiPay. This division is the most exciting and currently accounts for about 10% of the business revenue. FindiPay has a tall mountain to climb for success but if it gains traction, it could be a game changer and multi-bagger opportunity for investors. Currently FindiPay is offered through 18,000 merchants as at 30 Nov 2023 and is on track to reach 25,000+ by 30 June 2024. The merchant, who is based in rural or semi-rural India (est 300m-400m end customers), offers the opportunity for the end customer to make digital payments through the FindiPay platform. These merchants often have the only reliable internet and tech-knowhow for the immediate community whom only use cash. Some merchants are being branded with FindiPay like Tiptop or Coke will put their branding on a dairy in NZ. FINDI’s ultimate goal is to have the FindiPay platform on the end customers mobile, this is a 3year+ target their 600+ Indian based staff are working towards.

FINDI have applied to the reserve bank of India for a white label ATM licence. Management have said if this is granted it will open up huge opportunities for FINDI. The licence was expected by the end of 2023 however no announcement was made advising of this. If a licence is granted FINDI will be able to put their white label ATMs in FINDI-Pay branded merchant stores creating a unique ecosystem. (The white label licence announcement should drive material share price appreciation.)

As an example, customers will be able to withdraw cash from their ATMs and then use the cash for a digital payment of bills with the merchant. This builds a circular ecosystem and bridges the divide between the cash economy and the digital economy. FINDI are also able to clip the ticket in both channels.
FindiPay services:

Financial services- Bill payments, credit card payments
Banking services – Domestic money transfer, Aadhaar enabled payment services (this is like a credit card but without the card), Indo-Nepal money transfers.
Cash drop at merchant locations
Other services including prepaid recharge, rail and air travel, premium payments.

Valuation time….

Market cap today is $37.23m.
Options (FNDOB): there are 18.2m options which expire on 17/01/2024 with an exercise price of 90 cents. Assuming all options are exercised the new market cap will be:
Current shares= 37.9m
Add converted options= 18.2m
Total shares= 56.1m
New market cap = $0.98 sp x 56.1m shares on issue = $54.9m market cap.

Valuation 1:
On 15th of November TSI India raised $37m via a debenture that pays an 8% coupon. The debenture will compulsory convert to 16.7% equity at an intended IPO on the Bombay stock exchange. The debentures are held by Piramal Structured Credit Opportunities Fund which is 75% owned by one of Canda’s largest pension funds (guru valuers..).

The value of TSI India was set at $153m or 9x FY23 EBITDA of $16.8m which seems about right as these businesses seem to be valued at about 8x EBITDA multiples.

FINDI own 90% of TSI India or $137.7m of the $153m valuation. YES that means FINDIs holding in TSI is worth 2.5x todays market cap of $54.9m (assumes all options are exercised).
FINDI does have an option to buy back this debenture at an 18% IRR.

Valuation 2:
On 29th November 2023 1H24 results were announced.

Revenue $31.7m during the half up 30% on pcp.
EBITDA $12.6m up 84% on pcp.
NPAT of $1.1m up from $0.2m pcp

FY24 guidance:

Revenue $67.3m
EBITDA $23.6m
Operating cash flows of $20.6m

Based on the FY24 guidance and established EBITDA multiple of 8-9x. We get $23.6x 8.5= $200.6m FINDI valuation or 3.6x current market cap of $54.9m.

Valuation 3
Management are targeting a listing of TSI on the Bombay stock exchange in 3+ years time with a target market cap of $500m. Assuming the Indian management team hit their targets they will have a 20% shareholder, Piramal will have 16.7% leaving FINDI with 63.3%. 63.7% of $500m = $316.5m or 5.7x current market cap.

Other valuations:

Trading 0.82x FY24 revenue guidance of $67.3m
Trading 2.7x FY24 operating cash flows guidance (this includes lease costs)
Trading 2.3x FY24 ebitda guidance

Net debt as of 29 Nov 2023 was $21m comprised of $37m of cash reserves and $58.1m of gross corporate debt. Assuming all options are exercised on the 17th of Jan it will add $16.38m cash bringing net debt down to $4.62m. It has been stated that the cash will be used for acquisitions in the ATM space and further business development.
The investment for me has little downside risk but huge upside. It’s not often you can invest in a profitable business with a strong balance sheet that is developing an exciting fintech business operating in one of the fastest growing economies in the world. The current SP is being depressed by the upcoming option exercise date. The SP did reach $1.30 before being sold down to narrow the gap to the option exercise price of $0.90. People could have been selling the head shares to fund the options exercise price. I am guessing that once the options are converted and bedded in and we get an announcement of the white label ATM licence being granted the SP could materially appreciate, possibly towards the $2 mark.

Disc i have 10% of my portfolio invested in these. DYOR

JBmurc

06-01-2024, 11:02 PM

Yes, an interesting one to keep an eye ... on not much of a fin-tech investor..but number are numbers and they could well be impressive going forward for FND

"Findi is moving away from reliance on ATM Contracts with major Indian banks, to becoming a White Label ATM operator and we are also in the process of growing our business by seeking to increase the breadth of our services to become a full digital payments bank through obtaining further Indian government registrations under the new financial regulations being offered."

silverblizzard888

07-01-2024, 12:37 AM

Good summary, no matter how you look at it the stock is very undervalued for its growing financials. I'm a huge fan of the stock and believe its got tremendous value to be unlocked particularly given its consider one of the big players in the ATM industry in India. India's going to be a super wealth nation going forward so its a good way to gain exposure to its growing economy. When their white label license comes through it should help unlock further potential to explore an underserved population that doesn't have immediate access to ATMs, currently they are handicapped by only being able to operate ATMs within their ATM contracts. They are also future proofing themselves with Findipay.

The stock price is held back by the large amount of options that will expire soon. The white label license being issued or an acquisition announcement should get the share price moving. Theres also potentially a dividend of 30% of NPAT if they decide they have the cash to spare. A good sign they have reached a point where they can begin to grow their profits and share the spoils with their shareholders. Its just a matter of holding and waiting while they do their thing.

DarkHorse

09-01-2024, 09:28 PM

Rawz

10-01-2024, 04:54 PM

Nice analysis Rawz. I have modest holding. The November $37m sophisticated fund investment both underscores their potential and significantly derisked them - debt and potential dilution kept me on the sideline prior to that.

Of course in most countries ATMs are dying business, but the Indian market is very different. This video presentation by the Chairman is worth watching https://www.youtube.com/watch?v=t0uEgqIf6jw (if the link doesn't work, google "youtube webinar sharecafe fnd")

Thats is a good presentation. Nicholas Smedley talks well. He seemed reasonably confident in winning more ATM contracts. In the presentation he mentions that they are quoting for blocks of 2000-3000 ATMs. Historically (as per CBI ATM contract) 2,550 ATMs generated additional revenue of $27m p.a. and $12m EBITDA p.a. So its meaningful growth on FY24 guidance of $67m revenue and $23m EBITDA if they win even one of the tenders. And again if the white label licence is granted by the Indian reserve bank then this year could be very exciting for us shareholders.

Its worth noting that the 3 directors are also confident shareholders. They put their money where their mouth is by buying shares at every opportunity- unlike a lot of directors that often hold zero shares even though they have sat on the board for multiple years.. directors buying with money out of their pockets is a big vote of confidence.

18/10/2022
- $2.8m cap raise.
- directors subscribed for $550,000

06/03/2023
- $2.3m cap raise
- directors subscribed for $200,000

19/12/2023
- 1,087,000 options exercised by the directors
- $978,300 consideration

Rawz

10-01-2024, 04:59 PM

BTW- i dont normally like talking about EBITDA.. prefer NPAT.. but EBITDA is one to watch with FND. From what i can tell the ATMs are being depreciated over max 6 years but have a useful life of around 12 years. Ive watched a couple of youtube videos on ATM businesses and the upkeep is very minimal. Its basically 99% cost upfront and then once you depreciate it everything drops to the bottom line with what seems to be no more capex required.

Rawz

17-01-2024, 09:51 AM

Last day to exercise the options. will be interesting to see the final count.

Muse

19-01-2024, 10:21 AM

Rawz

19-01-2024, 10:59 AM

am sure cash, and thus atms, play a different role in india than in the rest of the world.
worth recalling ATMs going the way of the dodo at a rapid clip here and in australia
https://www.auspaynet.com.au/resources/device-statistics

Yes its certainly a sunset industry in the west. FND take great effort to ensure every investor presentation talks to how different the Indian economy is (especially in the rural- semi rural) with cash use still growing double digits. Its a cultural thing as well to use cash from what i can gather.

An issue to keep an eye on but possibly nothing to worry about for the next 10 years (i believe Smedley said that in one of his many interviews)

Sideshow Bob

19-01-2024, 12:13 PM

Rawz

19-01-2024, 01:51 PM

Agree with Rawz, have to be aware of the wider global macro trends for sure, but that Indian market is very different and even if some sectors/demographic groups do change there is a large portion of the population that will be reliant on cash for the near future.

Very modestly valued currently with plenty of upside. Only 40.7m shares on issue currently (which will change with the options), so today with a market cap of about $40m AUD.

Market cap of $40m and FY24 guidance of $23.6m EBITDA. FND has to be the most undervalued stock in Australia.

Not only is the market cap completely off the current fundamentals it has priced in zero upside. So as more people become aware of FND current investors will see this fairly valued and then multiple expansion. The double engine dream

Sideshow Bob

19-01-2024, 02:25 PM

Market cap of $40m and FY24 guidance of $23.6m EBITDA. FND has to be the most undervalued stock in Australia.

Not only is the market cap completely off the current fundamentals it has priced in zero upside. So as more people become aware of FND current investors will see this fairly valued and then multiple expansion. The double engine dream

Well I did say "very modest"! :p Maybe I should have said "really very very modest.....".

The share price does move around a bit through the day, so always a good chance for a small top-up for a few cents less.

Rawz

19-01-2024, 02:44 PM

Well I did say "very modest"! :p Maybe I should have said "really very very modest.....".

The share price does move around a bit through the day, so always a good chance for a small top-up for a few cents less.

So cheap im thinking- is this too good to be true??

No doubt a few punters exercised options for a quick gain. SP could be under pressure for a bit.

Muse

19-01-2024, 04:17 PM

Yes its certainly a sunset industry in the west. FND take great effort to ensure every investor presentation talks to how different the Indian economy is (especially in the rural- semi rural) with cash use still growing double digits. Its a cultural thing as well to use cash from what i can gather.

An issue to keep an eye on but possibly nothing to worry about for the next 10 years (i believe Smedley said that in one of his many interviews)

I only posted those auspay stats as I was looking at them re SMP and thought oh yeah, FINDI

Not surprised to hear the indian economy is much cash based

Rawz

22-01-2024, 05:58 PM

Big move up today, much to my surprise. I always thought post the options being exercised the SP would be under pressure for a few weeks.

Rawz

24-01-2024, 02:13 PM

Another good day. And still very cheap. SP should be up towards $3 mark. Refer to my first post on this thread for valuations

Sideshow Bob

24-01-2024, 04:40 PM

Amazing how it moves 20%+ in two days......

Rawz

24-01-2024, 04:55 PM

Amazing how it moves 20%+ in two days......

Yes. Could be market just catching on to how undervalued it is? Or white label Licence or new contract has been granted and leaked? I don’t know but am happy lol

silverblizzard888

25-01-2024, 03:39 AM

Good to finally have the overhang from the options out of the way and the only way anyone gets in the stock is buying the actual stock. The volume traded is much higher than when the options were still active, so it seems a lot of buyers waited till the options expired before getting in.

percy

25-01-2024, 11:24 AM

Findi gets a mention.
https://stockhead.cmail19.com/t/d-l-vukuyhd-yupddjlly-b/

Sideshow Bob

25-01-2024, 02:34 PM

Another good day. And still very cheap. SP should be up towards $3 mark. Refer to my first post on this thread for valuations

You must be having another good day Rawz.....

$1.30. :p

Rawz

25-01-2024, 04:04 PM

You must be having another good day Rawz.....

$1.30. :p

Sometimes I get the odd one right lol

Rawz

25-01-2024, 09:29 PM

I’m no TA guru but it’s broken recent high on large volume which I believe is very good sign.

silverblizzard888

27-01-2024, 10:42 PM

Banyantree investment group doing this best to put the word out about Findi being their top 3 Indian investments this week, all over different Australian media sites. Next week could be interesting if many investors start hopping on.

Sideshow Bob

29-01-2024, 12:44 PM

Sideshow Bob

29-01-2024, 01:52 PM

$1.53. Rawz must be on holiday today.....either that or he's fainted! :p

Rawz

29-01-2024, 02:55 PM

:drool::drool::drool::drool::drool:

percy

29-01-2024, 03:46 PM

:drool::drool::drool::drool::drool:

Well done.

Rawz

29-01-2024, 10:05 PM

Thought I would update some valuation scenarios as the stock is up 57% since my original posting. Just to show there is still plenty of meat on the bone for a feed- imo.
I did buy more today at $1.50 per share.

FND market cap today is $75.6m
Total shares on issue: 48,801,290

FND subsidiary TSI India was valued at $153m on 15th November by Piramal whom are 75% owned by the Canadians. The valuation came about by a $37m debenture placement which converts to equity at a time that TSI is floated on the Bombay stock exchange.

FND own 90% of TSI.
FNDs stake in TSI is worth: 90% x $153m= $137.7m.

FND SP needs to gain 82% to reach this $137.7 valuation.

---------------------------------

FND FY24 guidance

Revenue $67.3m
EBITDA $23.6m
Operating cash flows of $20.6m

The Piramal valuation above was based on an 8-9x FY23 EBITDA multiple.
8.5x FY24 EBITDA= $200.6m valuation.

FND SP needs to gain 165% to reach this $200.6m valuation.

---------------------------------

There are some other valuations linked to the planned listing on the Bombay stock exchange. However right now its best to just follow the EBITDA growth of majority owned TSI India (other owners are TSI senior management).

This calendar year is going to be exciting to watch. If a white label license is issued it will open up a big runway of future growth.
Additionally, late last year the chairman mentioned they were tendering for more brown label ATM contracts with other banks in India. These were for many thousand ATMs (FND currently manage 20,500).

Lastly the sleeping dragon is FINDI-Pay. The fintech part of the business that accounts for 10% of revenues currently but is growing rapidly. This is most exciting and if it gains traction will make the ATM part of the business look like a silly side hustle

Joshuatree

30-01-2024, 09:32 AM

Rawz

30-01-2024, 09:54 AM

I wanted to buy if it broke the last $1.30 high but was too slow to move and when it hit $1.60 i thought bugger it ill just let what i have ride.

However I pondered for a couple of hours yesterday arvo and thought na its still way undervalued so bought up fairly big (for me) at $1.50 when it pulled back.

My thinking was around the downside risk and losing money on the $1.50 buy and went something like this:
- Strong balance sheet thanks to the options being exercised
- Directors all put in substantial money by exercising their options and now have big skin in the game via substantial (5%+) holdings
- The major ATM contracts go out to 2029 and 2031 so income is secure for the medium term

So I was like na the downside risk is small so its okay to have a decent punt here and top up.

Then of course the upside potential is very strong as any day now the white label license could be announced or new ATM contract could be announced or the run rate of new merchants added to the FINDI-pay platform increases..
Then there is the whole booming Indian economy thing and FINDI is one of the only ASX listed pure plays in that market. So as word gets out and the market cap gets up over $100m more funds will be keen/able to buy in.

And lastly this is why I post that update valuation last night above just to clarify in my mind that $1.50 was not crazy stupid buying.

Joshuatree

30-01-2024, 11:18 AM

All good but alot of expectation of white license approval may be built into the price rise.Its not a 100% sure bet the licence will be granted? Or it will be but timeframe my be longer*?

Rawz

30-01-2024, 11:53 AM

All good but alot of expectation of white license approval may be built into the price rise.Its not a 100% sure bet the licence will be granted? Or it will be but timeframe my be longer*?

Its possible. I'm leaning towards the side that white label is purely upside. I.e. the FY24 guidance provided is just based on current contracts. And based on FY24 guidance its cheap.
Any white label ATM rollout would fall into FY25 and beyond anyway.

Announcement just out now:

https://stocknessmonster.com/announcements/fnd.asx-3A635352/

Findi Chairman Mr Nicholas Smedley commented: “The option conversion was strongly supported by existing shareholders and is a clear endorsement of Findi’s strategy and the results being delivered by the Board and Management Team.

“These funds, together with the funds raised from the Piramal Alternatives placement in November 2023, ensure that Findi is well capitalised and provides flexibility with respect to pursuing growth and scale through accretive acquisitions, the expansion of the FindiPay footprint and product offering and the roll-out of white label ATMs.

“Our application for a white label ATM licence remains before the Reserve Bank of India and we remain confident that the licence will be granted in the near term.”Findi has expanded rapidly in India during the past 12 months, including an acceleration ofgrowth in its merchant footprint, GTV and ATM network.

Sideshow Bob

30-01-2024, 12:14 PM

Muse

30-01-2024, 01:00 PM

Nice work rawz - you LEGEND!

Rawz

30-01-2024, 03:03 PM

Intraday $1.41 - $1.60. lol wow.
where it lands at close I have no idea...

Rawz

31-01-2024, 09:04 AM

Good rationale to work through your equation again.

Also, I can't see anywhere where you've allowed for the $10.7m raised - which equates to just shy of 22c per share.

142k through in the first 10 minutes this morning......

The $10m raised also issued a bunch of new shares so it essentially already gets accounted for.

I think overall the company will still have net debt right now. Only a small amount. However by end of financial year that may swing to net cash since they are going to generate $20m op cashflow in this year as per guidance.
(FCF was $12.4m at half year)

But then they have flagged on multiple occasions acquisitions in the ATM space so they intend to use the balance sheet strength which means going back into net debt.

Rawz

31-01-2024, 02:33 PM

Well with the benefit of hindsight the $1.50 big top up was a good call. But i did the work and thinking and ran though the process... so im not surprised but still, i am very happy with myself

MST Access has initiated coverage and OMG THEY HAVE SET THEIR VALUATION AT $4.31/SHARE

https://www.mstaccess.com.au/company/findi-limited you may need to create an account. Its free.

NEED TO KNOW
− Listed exposure to growing Indian fintech market
− Large ATM footprint generating significant cashflow for returns and reinvestment in digital banking services
− New funding shows potential valuation read through

Direct exposure to a global emerging market:
Findi is the only Australian listed company that provides direct access to the emerging Indian fintech market, which services 1.4 bn people (~25% remain unbanked) and remains heavily dependent on cash transactions. Findi’s strong ATM network is highly cash generative and supports its digital services growth, diversifying the business.

Key partnerships with major market players:
Findi’s 20.5k ATM network isunderpinned by two highly significant agreements – with the State Bank of India and the Central Bank of India. 80% of Findi’s revenue base is contracted, withthe average contract length almost 5 years, aiding earnings certainty.

Recent funding agreement:
Findi’s 100% owned Indian subsidiary, TSI India, raised A$37.6m via Compulsory Convertible Debentures (CCDs) from leading Indian investment group, Piramal Alternatives (owned by Canada’s largest pension fund, CDPQ). Upon an expected TSI IPO, the CCDs will convert to ~16.7% of equity, implying a total market cap for TSI India of ~A$225m.

Investment Thesis

Only Australian-listed way to gain access to Indian fintech market:
As one of the world’s largest non-bank ATM operators in a very large market, Findi services >2.7m customers daily in India across >30k locations, involving both ATMs and merchants. We expect this footprint to continue growing alongside population growth (from 1.4 bn currently), a reduction in the unbanked population (estimated at ~25% presently) and further adoption of digital payments by anincreasingly digitally literate younger generation, even while cash remains king.

Leveraging ATM stronghold to cross sell digital services:
Findi is uniquely positioned as an end-to-end provider (the only fintech provider that provides both ATMs and digital services) that can leverage its basic cash services, as a cheap customer acquisition channel, to further develop into a full-service digital banking provider. Both business segments provide significant diversification benefits.

Current earnings multiple highlights value on offer:
Recent management guidance was reaffirmed in the 1H24 result announced in November 2023(reported revenues of $31.8m and EBITDA of $12.6m). Applying a conservative market multiple of 10.5x to our FY24 EBITDA forecast results in a valuationsignificantly higher than the current share price.

Valuation

Findi’s earnings outlook underpins our valuation. We derive a valuation based on a 10-year DCF and market EBITDA multiples basis (equally weighted). Our valuation of $4.31/share is supported by our view that growth in Findi’s ATM network and services will support revenue and profitability.

percy

01-02-2024, 11:25 AM

Rawz

01-02-2024, 09:08 PM

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02768254-3A635606

The company may not know why the share price increased.
We here all know it was because of Rawz's posts.
If you read enough posts from someone who is often ‘well positioned’ you will eventually get one right and be ‘well positioned’ yourself :)

percy

05-02-2024, 10:10 AM

Stockhead this morning;
ASX-listed Indian-focused fintech Findi (ASX:FND) topped the tech winners list in January. FND announced in January it had received $10.7 million in cash and issued 11,942,609 fully paid new shares in the company, through the conversion of 11,942,609 listed options (ASX: FNDOB), each having an issue price of 90 cents/ share.

The remaining 6,289,678 listed options have expired unexercised.

“The option conversion was strongly supported by existing shareholders and is a clear endorsement of Findi’s strategy and the results being delivered by the board and management team,” says chairman Nicholas Smedley.

“These funds, together with the funds raised from the Piramal Alternatives placement in November 2023, ensure that Findi is well capitalised and provides flexibility with respect to pursuing growth and scale through accretive acquisitions, the expansion of the FindiPayfootprint and product offering and the roll-out of white label ATMs.

“Our application for a white label ATM licence remains before the Reserve Bank of India and we remain confident that the licence will be granted in the near term.”

Rawz

12-02-2024, 09:28 AM

Microcap guru investors DMX held a bunch of FND shares and options after supporting earlier cap raises. I had been waiting for their monthly update to see what they did with their options. They sold into the recent price rise to control their weightings. So sold around $1.40-$1.70 range. Not bad instant return on the options exercised at $0.90. However what ever happend to letting your winners run? DMX have a $3+ valuation on FND and noted $6 per share valuation if they were to list on the Bombay stock exchange with a $500m market cap. However they seem to see value everywhere in the micro cap space and thus trying to spread around limited funds means you take profits from outsized positions i guess. They run two funds and different commentary for both funds, below;

DMX Australian Shares Fund
Activity With the smaller company segment of the market having been so neglected in recent times, we’re looking very closely at all our portfolio exposures as we seek to direct capital to the most compelling of an expanded opportunity set. With so little cash to put to work, and so many opportunities both within the portfolio and in our pipeline of prospects, it’s a happy problem to have, but still a problem. Takeover activity has helped mitigate the problem, with Cirrus proceeds providing liquidity. We banked Shriro’s capital return in January, and have further trimmed our position here into continued subsequent price strength. Shriro remains an attractive holding for its cash generative nature and now much lower reinvestment risk profile, having returned its surplus cash to shareholders. But growth isn’t obvious and other opportunities are taking preference.

These funds have been useful as we’ve recently established two new small positions (each of which have low liquidity and we continue to seek to add to), and have continued to add to our Fiducian holding, bringing this to a fuller 4% portfolio weighting. Most meaningfully, we exercised our Findi options this month, bringing the position to a full 5% weighting which has expanded to over 8% at month-end. This sizing is a little unusual forus but we’re broadly comfortable given the value on offer even at these higher prices, and the strong operational execution & momentum the business is enjoying. We expect to trim to control sizing not too far from where it is now, but believe it’s useful to highlight as we might expect a little more than usual volatility to the fund in the event of material movements to such large positions’ stock prices in the short term.

The DMX Capital Partners report’s theme this month is the challenge many companies are facing in needing to achieve or maintain reasonable profitability in the near-term, while seeking to invest heavily for long-term growth and value creation. Three positions – all also owned by DMXASF – are highlighted with commentary included in an Appendix: Ansarada, Knosys and Careteq

DMX Capital Partners Limited

2024
It has been a busy and productive start to the year for us:
• We are pleased to have been involved in the recent re-capitalisation of two (leading one of them) interesting sub-$20m companies on what we considered to be very attractive terms, that have very high IRR potential. We look forward to discussing these unique, prospective opportunities in future updates.
• In early January, we were required to decide whether to convert our significant FND option holding at 90c. To get more confidence around this position, as part of our continuing due diligence, we have had various meetings with FND’s directors, its external accountant and other large FND shareholders. With the options convertible at 90c, and the share price having traded up to $1.70 post the conversion, we remain comfortable with our decision and our exposure here, having trimmed into the share price strength.
• We are also currently involved in progressive discussions with the directors, and other large shareholders, of several portfolio companies that we have held for some time, in relation to board composition and strategy, as we look to take a more active role in 2024 to extract shareholder value and improve investor outcomes across the portfolio, where we see the opportunity.
• We continue to review and meet with a number of prospective, unique investment opportunities.

Muse

12-02-2024, 10:15 AM

thanks rawz
DMX are well worth watching

Sideshow Bob

12-02-2024, 04:05 PM

Bit more action today, after a bit of a breather last week....

Rawz

14-02-2024, 09:42 AM

SP has had a good run up from low $1.40s range. Maybe the likes of DMX have finished rebalancing. I think most retail investors are happy to hold to over $2 based on HC posts and my thinking (basically just pure speculation lol).

A few charting posts on HC saying all is looking good. Passing through FIBs and what not. I dont care to learn that stuff but sounds all good.

Still waiting for the white label license to be announced. must be any day now surely

Rawz

20-02-2024, 12:10 PM

Strong open. Often does. Then drifts back.

Not much on offer thou. $2 not far away i reckon.

Still cheap. But ill have to offload some soon. Maybe over $2.20. Just talking out loud

Rawz

20-02-2024, 01:03 PM

Jeepers might do $2 today

Rawz

20-02-2024, 01:13 PM

Market cap $93m. Might land on a few more desks once it pops over $100m. Then more demand for SP.

Wonder where the white label license is at. And wonder what the SP reaction will be if/when its granted.

Also would love an update on the Findi-pay merchant numbers.

Rawz

20-02-2024, 01:30 PM

Market cap of $40m and FY24 guidance of $23.6m EBITDA. FND has to be the most undervalued stock in Australia.

Not only is the market cap completely off the current fundamentals it has priced in zero upside. So as more people become aware of FND current investors will see this fairly valued and then multiple expansion. The double engine dream

Post this 30 days ago. Market becoming more and more aware. Double engine dream coming to fruition

Muse

20-02-2024, 07:03 PM

Jeepers might do $2 today

2 bucks and change

Rawz

20-02-2024, 07:10 PM

2 bucks and change

$100m market cap. Aggressive buying and a $700k buy order put in at $2 just before close… didn’t get hit.

Maybe big boys take over now.

Sideshow Bob

21-02-2024, 08:20 AM

2 bucks and change

Well done Rawz. :t_up:

Double win too getting out of HCL early.

Rawz

21-02-2024, 09:39 AM

Well done Rawz. :t_up:

Double win too getting out of HCL early.

That was just pure luck. I was quite bullish on it. Ive mentally noted HCL as a loss and made some notes about it in the Rawz book of f-ups (which has many pages lol)

Muse

21-02-2024, 09:58 AM

That was just pure luck. I was quite bullish on it. Ive mentally noted HCL as a loss and made some notes about it in the Rawz book of f-ups (which has many pages lol)

Good work, I’ve got one of those too.

percy

21-02-2024, 10:18 AM

Good work, I’ve got one of those too.

I am on volume 3.....lol

Rawz

21-02-2024, 10:22 AM

I am on volume 3.....lol

:lol::lol::lol:

Sideshow Bob

21-02-2024, 10:40 AM

I am on volume 3.....lol

I've got to start one of those - try to forget but most are seared in my memory......;)

Muse

21-02-2024, 11:15 AM

I've got to start one of those - try to forget but most are seared in my memory......;)

re-reading mine gives me a bit of PTSD...."I did WHAT?!!"
Password protected too should my wife ever login to the computer and see what a numpty she married lol

Rawz

21-02-2024, 12:08 PM

re-reading mine gives me a bit of PTSD...."I did WHAT?!!"
Password protected too should my wife ever login to the computer and see what a numpty she married lol

Loooool :lol::lol::lol::lol: so good

Rawz

29-02-2024, 12:50 PM

Big jump this morning on no news..?

Sideshow Bob

29-02-2024, 01:47 PM

Big jump this morning on no news..?

Trade just gone through at $2.43.....!! :blink:

What the f........??

Has to be a speeding ticket in the mail, surely!

winner69

29-02-2024, 02:28 PM

Jeez rawz …it was only about $1 when you told me to have a punt on FND

Should have listened to you mate

Well done on your new found riches

Rawz

29-02-2024, 02:31 PM

Trade just gone through at $2.43.....!! :blink:

What the f........??

Has to be a speeding ticket in the mail, surely!

SP trading has been strange. Kept getting sold down early morning to $1.90 ish but would finish the day at $2. Did this a few days, i just thought it was tree shaking stuff or games by bigger players. I have no idea of the full extent of those games that are played,,, just know what ive read on STr and HC on different companies.

Anyways maybe the volume wasnt enough and now its been bid up to get more people to part with their shares.?

Im happy to hold for another few years while the ATM contracts are secure and see what is made of findi-pay division and white label licence (if issued). Could be $5-$6 per share all going well based on modest EBITDA growth and 8-9x multiple applied

Rawz

29-02-2024, 02:36 PM

Jeez rawz …it was only about $1 when you told me to have a punt on FND

Should have listened to you mate

Well done on your new found riches

I was unsure of myself so came to you and a couple of other wise masters to see your thoughts lol.
Lucky i backed myself.

Best thing is i told my dad after i took a position and sent through the research i did. He put some funds in and made $15k realised profit. For him thats a lot of money so im happy i was able to help the old boy out. He can buy a few pints at his local with that.

Sideshow Bob

29-02-2024, 02:42 PM

I was unsure of myself so came to you and a couple of other wise masters to see your thoughts lol.
Lucky i backed myself.

Best thing is i told my dad after i took a position and sent through the research i did. He put some funds in and made $15k realised profit. For him thats a lot of money so im happy i was able to help the old boy out. He can buy a few pints at his local with that.

Awesome.....:cool:

Rawz

29-02-2024, 07:13 PM

Trading 4.5x FY24 ebitda guidance after today’s gain.

Can trade 8-9x ebitda.

SP will go $4+ imo.

Rawz

01-03-2024, 12:50 PM

Good update today. Options priced well imo.

https://research.iress.com.au/IDS/old/20240301/02780070.pdf?uid=7A5E78015E56B78833FDF56ED5903945D 50F0000AE3C20593225E640093D250091850000&ppv= (https://research.iress.com.au/IDS/old/20240301/02780070.pdf?uid=7A5E78015E56B78833FDF56ED5903945D 50F0000AE3C20593225E640093D250091850000&ppv=)

Digital payments and financial services provider Findi Limited (ASX: FND) (Findi or the Company) is pleased to announce the appointment of Alastair Williams as the Company’s Chief Financial Officer (CFO), effective 1 March 2024.

Mr Williamsis an experienced CPA with a Masters Degree in Commerce. He has recently been the CFO of an Electricity retailer and before that was a Partner at boutique accounting and finance firm, Clarendon Partners.

In addition to day-to-day duties as CFO, Mr Williams is being tasked specifically with supporting the Board and our Indian subsidiary with listing in India.

The Company has agreed to offer Mr Williams (or his nominee) 565,000 options pursuant to an Employee Share Option Plan to be adopted by the Company. The agreed terms of the options are below:
• 120,000 unlisted options with an exercise price of $2.50 vesting 12 months from the date of appointment;
• 175,000 unlisted options with an exercise price of $3.00 vesting 24 months from the date of appointment; and
• 270,000 unlisted options with an exercise price of $3.50 vesting 36 months from the date of appointment.

Sideshow Bob

01-03-2024, 02:12 PM

His contract was probably done a week or two ago.

After recent SP action it's not actually that far to be in the money on the 1st tranche of options!! :p

Rawz

01-03-2024, 03:47 PM

His contract was probably done a week or two ago.

After recent SP action it's not actually that far to be in the money on the 1st tranche of options!! :p

I believe in incentives and so yes this guy will be doing everything he can to get the SP up up up. He'll no doubt want big % gains on his $3.50 options....

I dont think $4 is unreasonable some point later this year. Ive seen some long term valuations based on modest EBITDA growth at $6+ per share.

Some guy post on HC today that TSI India's (FNDs subsidiary) competitor AGS Transact Technologies have a EBIT loss of $11m yet have a market cap of $195m...

Vs FND market cap of $108m and EBITDA guidance of $24m

Sideshow Bob

11-03-2024, 11:43 AM

Good update on their white label ATM licenses and some positive news to start the week Rawz......

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02783164-3A638508

Rawz

11-03-2024, 11:58 AM

Good update on their white label ATM licenses and some positive news to start the week Rawz......

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02783164-3A638508

Excellent news. More so to remove any doubt punters might have had that the white label wasnt going to be issued.

I would love an update on Findi-Pay merchant numbers. Maybe later in April after we close out this quarter. Or in May for end of year prelim numbers

Rawz

11-03-2024, 02:28 PM

The importance of the white label licence...
Findi can now put an ATM in their merchant stores. So a customer can walk into a store and get cash out of the ATM (ticket clip once) and then give it to the merchant using Findi-Pay (ticket clip twice) to pay for their online stuff.

Additionally, Findi can now look at acquisitions using their strong balance sheet post the options being exercised and last years debenture issue. By all accounts the ATM industry is fragmented and consolidation is on the cards.

All good stuff and progress being made. Market cap still just a bit over $100m. Happy to hold.

Rawz

13-03-2024, 03:27 PM

Strong couple of days since white label announcement.

Once formalized by the Mumbai reserve bank I’m expecting FND to come out with another announcement providing some more colour around what this will mean for additional future income growth

Rawz

20-03-2024, 01:38 PM

RalphWiggum

20-03-2024, 02:02 PM

she's a rocket ship to the moon :eek2:

My valuation is $4.20. Based on 8x ebitda multiple on the ATM business and 3x revenue multiple on the findi-pay business. Comes out at $4.20 lol. Musk would like that

Hi Rawz,

Just wanted to thank you for bringing Findi to my attention a few weeks ago. Your posts lead me to buy a decent holding, on which I'm up 112% today.

Cheers mate! :cool:

Rawz

20-03-2024, 02:05 PM

Hi Rawz,

Just wanted to thank you for bringing Findi to my attention a few weeks ago. Your posts lead me to buy a decent holding, on which I'm up 112% today.

Cheers mate! :cool:

I'm so happy to hear that. Well done to us and all other holders :cool:

Sideshow Bob

20-03-2024, 02:19 PM

she's a rocket ship to the moon :eek2:

My valuation is $4.20. Based on 8x ebitda multiple on the ATM business and 3x revenue multiple on the findi-pay business. Comes out at $4.20 lol. Musk would like that

Well done Rawz and tip my hat to you. :)

I was already a holder (relatively smallish parcel) but appreciate your posts. I have to share more rep before I can give you any more!!

Rawz

22-03-2024, 07:54 AM

$3 party day today? Surely.. almost there.

Friday beers would be so much better

Rawz

22-03-2024, 12:40 PM

$3 cool :eek2::eek2::eek2:

Market cap is 3x when i made my first post and started this thread. I havnt sold anything. FND is over 50% of my portfolio now. I think my plan is once the White label is confirmed and depending on what they say in that announcement around new income i will start trimming. Im getting nervous with this size holding. Can still sleep at night but very nervous holding so much.

The problem is its not even overvalued or anything like that. Like some stocks can trade 10x revenue on nothing. Just a hope. Findi-pay could be that hope.. some stocks just explode in value on pure speculation. FOMO stuff. I feel like findi could do that and pay my mortgage for me lol

Sideshow Bob

22-03-2024, 01:14 PM

Rawz

22-03-2024, 01:32 PM

Going to be some good tasting beer tonight Rawz. Well done again! :cool:

Some of that price action is pretty crazy and can understand the sentiments with taking a bit off the table and sleeping better.

I had some of that with ATM back in the day. Bought at 67c and sold a good chunk at about $3.50 when building a house. Rest went at about $16.50 but felt the relief when sold as became a large sum......

thats a good story and wise words.

SP back down below $3 but no worries beers still on.

I drew a few lines on a graph last night (i wont post it cause you'll all laugh at me lol) and the SP line had gone outside the trading range. I thought to myself it probably has been a little too much of late and needs to settle down and retrace for another push.

Sideshow Bob

22-03-2024, 02:25 PM

Regardless, it's Friday! Beer Emoji

Looks like drifting back to where it started the day on low volume.

No one goes broke taking a bit of profit off the table, and a few here are "well positioned" with free carry's of their (sizeable) remaining positions in similar circumstances with different companies.

I'm no chartist, but would be interesting to see what a TA expert makes of the price action. There must be a good portion of short term trading, and many days the spread between highs and lows is getting around 10%.

But the big volume days are green days - so that must mean something?? No substantial holder notices for a while though.

Sideshow Bob

02-04-2024, 06:15 PM

Solid jump today, up 10.5% today.

A positive announcement incoming??

Rawz

02-04-2024, 09:08 PM

Good to see it close above $3

Sell side looking thin

Rawz

04-04-2024, 03:07 PM

I sold 20% of my holding at $3.30 today. Thought i should disclose that since ive been very bullish on FND.

Only sold because its so much of my portfolio. I still believe it will go up past $4 on a couple of good announcements.

i.e. white label confirmed and new income will be xyz. or
new merchant numbers have increased to 5000 per month and we will generate xyz income...

winner69

04-04-2024, 03:09 PM

Well done rawz

Joshuatree

04-04-2024, 03:11 PM

Smart strategy,bank the results reduce risk,spread the love.👍

percy

04-04-2024, 03:17 PM

Muse

04-04-2024, 05:47 PM

Be a nice feeling to see those returns banked. Boom time, legend.

Rawz

11-04-2024, 12:25 PM

here we go, trading halt

Findi Limited (ASX: FND) (the Company) requests a trading halt in relation to the Company’s ordinary shares (FND) quoted on the Australian Securities Exchange (ASX) in accordance with ASX Listing Rule 17.1.The trading halt is requested pending an announcement by the Company to the market in relation to an update to the White Label ATM Licence Application in India (Purpose).

Edit add: Bit nervous its a delay or decline. SP drop would be quite big if it was a decline even thou there would be no change to guidance.
I'm optimistic its an approval and the 'update' is talking about the additional revenue/profits this license will generate for the business.

Joshuatree

11-04-2024, 01:35 PM

Sure has created uncertainty about the final approval being given.That prior announcement now feels a bit cart before the horse and premature.Holders have had a near perfect run up till now👍.

Sideshow Bob

11-04-2024, 01:55 PM

Expect the worst, hope for the best........:sleep:

Rawz

11-04-2024, 04:39 PM

If it was bad then why would you need such a long trading halt..? its not like they have provided guidance relying on the license and need time to backtrack it and recalculate?
If it was declined you would think they would say it, flush the dunny then move on.. no need to wait so long.

I wonder if it is an announcement confirming the license is granted and an acquisition at the same time? This is something they have spoken about in the past. The balance sheet is ready for it. This could be the reason for the long halt..?

Just thinking out loud. Ive got a lot riding on this lol.

Sideshow Bob

12-04-2024, 08:07 AM

I see more of the Hot Copper team reckon its positive rather than negative........some guy over there mentioned $6.50.....!!

I'm just naturally pessimistic. :scared:

Rawz

12-04-2024, 09:17 AM

I see more of the Hot Copper team reckon its positive rather than negative........some guy over there mentioned $6.50.....!!

I'm just naturally pessimistic. :scared:

$6.50!! that guy is crazy :p

Sideshow Bob

12-04-2024, 09:25 AM

$6.50!! that guy is crazy :p

Completely crazy, but hope for his sake he is right!! :t_up:

Sideshow Bob

12-04-2024, 12:31 PM

Nothing through before opening this morning.

If bad news then think they would have ripped the scab off......??

Rawz

12-04-2024, 01:16 PM

Nothing through before opening this morning.

If bad news then think they would have ripped the scab off......??

Yes you would have thought so aye.. like no need for such a long halt if its a decline. Leaning towards positive announcement.

Rawz

12-04-2024, 01:18 PM

From DMX. DMXCP_March_2024_Investor_update.pdf (mcusercontent.com) (https://mcusercontent.com/1a84be027051b31062de96622/files/9d49dada-e15c-630e-495b-305b65ac8ab3/DMXCP_March_2024_Investor_update.pdf)

Findi (ASX:FND)

FND has experienced a significant re-rate in recent months, with its share price moving from ~50c in October last year,to trade above $3 during March. When we first invested in FND in early 2022 via underwriting a capital raise, it had a market cap of less than $5m, and was seeking capital to fund the buyout of the 75% of its Indian ATM and fintech business that it didn’t currently own. At the time, the stock was very much under the radar and misunderstood, and, as a result, in our view, was fundamentally mispriced relative to its potential future earnings profile, offering significant upside.

In our December blog article we discussed the FND opportunity and our $3 valuation target: Findi - A potential multi-bagger - DMXAM. During March, FND’s market cap reached $150m, while liquidity has gone from non-existent two years ago, to $1m+ of stock trading daily over recent weeks. We have been selling into this increased liquidity over recent weeks as our price targets were met.

While our thinking around FND’s expectations and valuation hasn’t changed much from how we viewed the FNDopportunity two years ago, the passing of time has allowed new investors to get more confident with management and execution, which has been strong over the past two years. While various operational and regulatory risks remain, as highlighted in the table below, FND’s ~20% revenue growth, and operating leverage, over the past two years has led to strong growth in EBITDA from ~$6m to ~$24m. FND’s balance sheet has also strengthened and we expect FND to finish its financial year with ~$30m net cash, following the recent option conversion.

We believe FND to be a good example of what we are trying to achieve and highlights the opportunities available to usin supporting mispriced, under the radar companies with attractive fundamentals, that are currently being ignored by the market because they are too small, illiquid and out of favour to generate market interest.

The last couple of years has been a difficult environment for this strategy. Certainly, execution issues amongst some of our portfolio companies hasn’t helped, but in this risk-off environment a significant challenge has been just the lack of investor interest and liquidity to generate new buying to clear the overhang of sellers in order to drive multiple re-rates and sentiment changes amongst small stocks.

Across the portfolio, we own various other companies that share similar characteristics to FND when it was very much under the radar: profitable, very low market cap, tight illiquid share register, unloved, ignored and in-efficiently priced by the market, but with the ability to capture market interest to drive a strong re-rate at some point. In recent updates we have talked about a number of portfolio companies that have been beaten down by the market to very low EVs that now offer substantial upside on the back of improving execution and sentiment from low bases. With more supportivemarket conditions, we are hopeful of more of these types of opportunities playing out.

Rawz

12-04-2024, 01:43 PM

see DMX have calculated FND will have an amazing $30m net cash???

30 Sep 2023 they had net debt of $21m.
Options raised $10m....

So DMX saying they have generated $41m in cash this half year??? not sure how that adds up

Sideshow Bob

12-04-2024, 01:52 PM

Yes you would have thought so aye.. like no need for such a long halt if its a decline. Leaning towards positive announcement.

What's that guy saying on HC today....?? Probably saying the same thing??? :lol::rolleyes::lol:

Rawz

12-04-2024, 02:21 PM

What's that guy saying on HC today....?? Probably saying the same thing??? :lol::rolleyes::lol:

I got a trophy the other day on HC. Not sure what that means but no doubt good internet points lol….

Sideshow Bob

15-04-2024, 09:04 AM

I think this is good news.....no?? :cool: Although no announcement as yet.

https://www.afr.com/technology/payment-provider-findi-lands-licence-for-branded-atms-in-india-20240414-p5fjp2

ASX-listed payment provider Findi, backed by Wilson Asset Management and the Flannery family, is set to gain a licence enabling it to splash its name on thousands of branded ATMs across India.
The fintech junior’s stock is up 430 per cent over the past year and settled at $3.20, earning it a $168 million market cap, before it went into a trading halt on April 11. “The market is starting to understand the opportunity we have in India,” Nicholas Smedley, Findi’s chairman, said. “We have significant Australian-based funds investing in the company.”

https://static.ffx.io/images/$zoom_0.254%2C$multiply_3%2C$ratio_1.5%2C$width_75 6%2C$x_22%2C$y_0/t_crop_custom/c_scale%2Cw_620%2Cq_88%2Cf_auto/c3406767eae0639ac72eab46857fa84945c0046fFindi won a contract to supply the State Bank of India with over 4000 ATMs last year. Bloomberg
Late last year a pre-IPO fund of Indian tycoon Ajay Piramal’s Piramal Group invested more than $37 million in Findi’s Indian subsidiary, TSI India, via convertible securities that are designed to turn into equity in the event of a float.
People familiar with the matter said TSI India has now been granted provisional approval for the licence that will allow Findi to deploy its own branded ATMs across the economy.
The company expects to rebrand about 4000 ATMs which it already operates for the State Bank of India during the 2024-25 financial year. It owns and operates 12,000 ATMs for large financial institutions such as State Bank of India and the Central Bank of India.

The seven-year contract with State Bank of India comes with a three-year extension. The bulk of Findi’s operations are in India.

Findi said the contract will offer between $500 million and $620 million in revenue were it to last for 10 years. “Locking in significant revenue and earnings for the next 10 years means Findi is now even better placed to take advantage of India’s transition from the cash economy into the digital economy over the next decade and beyond,” Mr Smedley said.

The company also offers digital payments and banking solutions. Mr Smedley said the subsidiary has aspirations for a listing in 2025 or 2026, possibly on the Bombay Stock Exchange.

The Piramal transaction valued TSI India at $190 million and the fund has captured investment from Canadian pension funds, according to Mr Smedley. “They did significant due diligence and this is an endorsement of our strategy,” he said.

Explaining the valuation, Mr Smedley previously said “[it] was based on effectively a 10 times multiple on last year’s earnings”.

Findi was previously known as Vortiv. In 2020, Vortiv sold its cybersecurity business to CyberCX, which has won Australian government contracts.

Rawz

15-04-2024, 09:40 AM

thanks for sharing Bob. Looks promising. D Day today. If bad $2.80sp. If good $4

Sideshow Bob

15-04-2024, 11:18 AM

Ohhhhh yeahhhhhh.........

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02795323-3A640548

Rawz

15-04-2024, 11:25 AM

Good news. But why such a long halt? lol
No financial news. Bit of a fizzle imo

Rawz

15-04-2024, 11:27 AM

Sideshow Bob

15-04-2024, 11:35 AM

Oh i missed this part:

“Securing a White Label ATM licence is also a key pillar for our strategy of becoming a full Indian transaction bank, as well as positioning us to participate in the long-anticipated industry consolidation and to complete well advanced acquisitions.

Another (great) step down the road.....but yeah, why did that need a trading halt, especially for a couple of days?? Unless was leaky - AFR article published before the announcement so it might have been out.

Rawz

15-04-2024, 12:19 PM

SP down on ho-hum announcement.

Halt too long for nothing burger.

Shame.

Sideshow Bob

15-04-2024, 12:23 PM

SP down on ho-hum announcement.

Halt too long for nothing burger.

Shame.

Probably white label ATM license already baked into the share price.

But a fizzer......

Rawz

15-04-2024, 12:25 PM

Probably white label ATM license already baked into the share price.

But a fizzer......

Yeah. Must wait for FY results next month. No doubt more detail in there

Sideshow Bob

15-04-2024, 12:27 PM

Yeah. Must wait for FY results next month. No doubt more detail in there

Last year about the 15th of May. So a month to wait for more. :sleep:

Sideshow Bob

15-04-2024, 04:26 PM

The markets a funny beast sometimes......

Confirmation of another step, confirmation of their direction of travel and down 4.7%. ;)

Rawz

15-04-2024, 05:53 PM

The markets a funny beast sometimes......

Confirmation of another step, confirmation of their direction of travel and down 4.7%. ;)

Market saying your announcement was avg.. lol. And I agree. Too much build up with the long halt and not enough financial info.

All good. The white label pretty much guarantees the medium term growth on top of the secure revenue coming from the contracts. So still a happy holder

Rawz

16-04-2024, 01:09 PM

Oh dear. Talk about a reversal of sentiment. Going to be choppy waters until next update

Sideshow Bob

16-04-2024, 03:49 PM

Oh dear. Talk about a reversal of sentiment. Going to be choppy waters until next update

Hmmmm yes just login in and surprised to see a hole torpedoed in my portfolio!

Down 16% at the moment - the market giveth, the market take it away.....

Agree, looks like short term will be choppy, nothing changed longer term. Need to hold on tight until the FY report in roughly a months time.

Rawz

16-04-2024, 04:06 PM

Hmmmm yes just login in and surprised to see a hole torpedoed in my portfolio!

Down 16% at the moment - the market giveth, the market take it away.....

Agree, looks like short term will be choppy, nothing changed longer term. Need to hold on tight until the FY report in roughly a months time.

A good opportunity for some to top up if they previously missed out. SP slowly crawling its way back. Not so bad now lol. Who knows where it lands.

Sideshow Bob

16-04-2024, 09:23 PM

A good opportunity for some to top up if they previously missed out. SP slowly crawling its way back. Not so bad now lol. Who knows where it lands.

Crazy day…..opens at $3.12, peaks at $3.14, hits $2.38 and closes at $2.71 with about 1m or 2% of the company traded - about 4x the average.

Exactly Rawz…….who knows!!

silverblizzard888

16-04-2024, 09:36 PM

A lot of it was priced into the stock, but the announcement was a delay since it comes with a condition that could take up to 6 months to fulfill, which for most don't want to wait. However at the end it does provide a solid outcome that they will get the license.

"Granting of the White Label ATM licence .. is only subject to ..submitting System Audit Report (SAR) within six months to obtain final authorisation for roll-out of WLA."

Rawz

17-04-2024, 08:08 AM

They have mismanaged the communication around the white label licence. Said it is going to be issued by Christmas last year, then by end of financial year. Got both of those wrong.

When it was approved by the reserve bank and just needed to be signed off by the Mumbai bank it was “imminent”.

Then they say it’s approved but actually na one more hurdle to jump. Lol..

Just feels a bit panicky. Smeadley and co need to relax and not rush things. Let the process work itself out and just concentrate on winning new ATM contracts and rolling out Findi pay. If they do that the rest will fall into place.

My expectation is come May we see what a cash cow FND is in the FY announcement. Then later in the calendar year we see an acquisition once the white label Licence is 100% confirmed. Throw in an ATM contract or 2 and the SP will do really well.

Sideshow Bob

17-04-2024, 09:00 AM

Working with regulatory/bureaucratic channels in most countries is not straightforward or predictable in terms of timelines. Especially if a company is from another country.

Needs to be accurate with their communication, err on the conservative with their announcements and show some patience.

Rawz

17-04-2024, 10:23 AM

winner69

22-04-2024, 12:38 PM

Deleted ..
About yWrong FND

Baa_Baa

22-04-2024, 12:47 PM

Hey rawz ..you should have a squizzy at this

https://x.com/mattjmcclintock/status/1782156077515096257?s=61&t=iHjDYVMfLj1Ccl5JFHMPjA

I think this is about $FND, Floor & Decor Holdings Inc trading on the NYSE. Not FND trading on the ASX?

Rawz

22-04-2024, 01:49 PM

I’ve noticed FND going up on the open and over the day slowly going back down then finishing in the red. I don’t think that’s good.

Market cap getting closer to $100m when it should be closer to $200m.

I’m of course riding through the turbulence

Is $FND a buy?

winner69

22-04-2024, 02:04 PM

I think this is about $FND, Floor & Decor Holdings Inc trading on the NYSE. Not FND trading on the ASX?

It is …sorry

Sideshow Bob

30-04-2024, 12:53 PM

Rawz, are FND back out of the naughty corner??

Have cracked back over $3......:)

Rawz

30-04-2024, 01:17 PM

Rawz, are FND back out of the naughty corner??

Have cracked back over $3......:)

Came here to post weeeeeee backkkkkk :cool:

Sideshow Bob

30-04-2024, 03:32 PM

Came here to post weeeeeee backkkkkk :cool:

:t_up::t_up::t_up:

winner69

12-05-2024, 11:51 AM

Rawz …did you see this

https://stockhead.com.au/experts/criterion-whos-cashing-in-on-cashing-out-in-india/

Rawz

12-05-2024, 10:55 PM

Rawz …did you see this

https://stockhead.com.au/experts/criterion-whos-cashing-in-on-cashing-out-in-india/

Thanks for sharing. Good write up, should get punters excited come Monday

Sideshow Bob

16-05-2024, 11:08 AM

FY results announcements should be any day now........

Rawz

16-05-2024, 11:26 AM

Looking forward to reading about the record result and most excited to see commentary on what FY25 will look like

The SP needs some direction. Has been swinging around on low volumes

Sideshow Bob

17-05-2024, 06:35 PM

Bit of a run late in the day back over $3 on better volume.

Roll on next week.....:)

Rawz

20-05-2024, 12:37 PM

trading halt... downgrade? or friday's jump was a leaky ship and its positive?

The trading halt is requested pending an announcement by the Company to the market in relation to an update on the Company’s FY24 financial results (Purpose).

Rawz

20-05-2024, 12:40 PM

Findi and their trading halts... not good for the anxiety levels lol

percy

20-05-2024, 12:42 PM

Findi and their trading halts... not good for the anxiety levels lol

I read it to mean you are "well positioned."...

Rawz

20-05-2024, 12:54 PM

I read it to mean you are "well positioned."...

Yes.... heavy allocation.

Listened to this podcast yesterday: TIP632: Mastermind Q2, 2024 w/ Tobias Carlisle and Hari Ramachandra - We Study Billionaires - The Investor’s Podcast Network | Podcast on Spotify (https://open.spotify.com/episode/3eL0tgrvybVDe4qbgH9yL7)

This specific episode was where a host and 2 guests pitch a stock. Hari Ramachandra pitched an Indian bank. He talked about how fast the Indian economy is growing and specifically the financial system. How the PM, Modi, was driving for all the underbanked to get a bank account and into the financial system. I couldnt help but think the entire time how I am very happy with my exposure to the Indian financial revolution (or whatever you want to call it) via FND. How all their ATMs will be a huge cash cow and how if they get traction on their Findi-pay system it will send the SP sky high.

Fun fact from the episode. All the Indian banks are trading 3-3.5x book value. HGH is trading 0.8x? Shows how excited people are about the financial space in India to reward them with such high book value multiples.

Sideshow Bob

20-05-2024, 01:19 PM

Findi and their trading halts... not good for the anxiety levels lol

Haven't checked in to see what the boys on HC are saying but I can sympathise.

I reckon it is a positive announcement coming.......

Rawz

20-05-2024, 08:24 PM

Current guidance issued 29 Nov 2023:

Revenue: $67m
EBITDA: $23.6m
Op cash flows: $20.6m

FINDI pay merchant stores to be at 25,000+

Smedley did say last year in an interview they were expecting to win new ATM contracts and the white label license would be issued Jan.
I wonder if they missed out on winning the contracts and due to the delay in the white label license it means guidance needs to be downgraded...

The white label revenue would of course just be deferred into FY25. Missing out on winning new ATM contracts is a different story..

Thats the downside point of view.

The upside is of course higher transaction volumes through the current ATMs, which they have said a few times the transaction volumes have exceeded their expectations. This + findi-pay merchant stores picked up from the 2000 monthly run-rate to much higher and revenue generated from these are above expectations. Last commentary is findi-pay revenue accounted for 10% of the business.

Flip a coin... See what happens. Good or bad. 50/50.
Likely we will get an update tomorrow and i wont be able to see it as ill be on plane and then in meetings. So ill likely just check the SP in the arvo and if its $2.50 ill know it was a downgrade. and if its $3.50 ill know it was an upgrade lol

Sideshow Bob

21-05-2024, 11:15 AM

Here you go Rawz:

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02808793-3A642790

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02808794-3A642791

Rawz

21-05-2024, 11:52 AM

Sideshow Bob

21-05-2024, 12:33 PM

Thank you! Headline numbers look great

Rocketship mode enagaged (again).

miner

21-05-2024, 01:06 PM

Good call guys :t_up:

Sideshow Bob

21-05-2024, 02:31 PM

Rocketship mode enagaged (again).

Rawz, Rawz are you still conscious mate??

Up 26% for the day. :t_up:

I think you gone from ‘well positioned’ to ‘REALLY well positioned’!

That $4 was a bit of a dream but not far away now.

Sideshow Bob

21-05-2024, 07:02 PM

Bit worried about Rawz……

I think he’s knocked back a celebratory 6 pack of craft beer, and feeling a bit under the weather??

percy

21-05-2024, 07:29 PM

Bit worried about Rawz……

I think he’s knocked back a celebratory 6 pack of craft beer, and feeling a bit under the weather??

Champagne surely.?

sb9

21-05-2024, 07:57 PM

Champagne surely.?

With some caviar surely.
Pretty happy with my holding which I got in bit late around 1.50, not complaining though, this has got lot more legs to go imo…

Rawz

21-05-2024, 09:37 PM

Excellent result, huge result..! I won’t get a chance to read it in depth until the end of the week unfortunately, due to work travel.

Fundamentals point to a big re-rate. I see they are giving FY25 guidance in 3 weeks time. Clearly setting us up for a big surge now and then another when we get that guidance.

So much to like, my ideal company; strong balance sheet, good news up cycle and soon to be strong forward guidance (I’m hoping).

Still cheap. I can see $6 by Xmas.

Now just need 2CC and TWR to complete the trifecta

Rawz

22-05-2024, 08:21 AM

Okay I have read the presso and this is a huge BUY. FND can re-rate to 10-20x ebitda multiple which may seem crazy but that’s what its peers are trading on. So can 2x..3x..4x.. your investment.

The thing is not only is it due a rerate but the ebitda is still going to grow. The SBI contract roll out, redeploy the brown label ATMs to white label, atm transaction fee increases, acquisitions, new contracts. It’s all there in front of us, just read the presentation. This is why I say maybe 4x your money from here if it all goes perfectly.

If you think about the current secure ATM contracts, net cash on the balance sheet, cash flow positive & npat positive, it is a very low risk investment with huge upside. Worth a big bet still and I’m fully loaded and comfortable. The only thing that can ruin me is fraud.

The unknown is Findi-pay. They didn’t really provided any $$$ on it. Is it profitable? We don’t know, unless I missed it.

I’m very bullish so someone needs to come in and put forward the bear case please, to settle me down lol

3 weeks time they will announce FY25 guidance, imo if you are thinking of buying you would want to do it before this time.

sb9

22-05-2024, 09:07 AM

Might see 4 handle today to sp, while news get digested and big boys draw their bows on the back of it.

Rawz

23-05-2024, 10:21 AM

Will wait for FY25 guidance and take ebitda and x that by 9 and that will be my new target price. Will know it will be conservative and subject to upside pending new contract wins, acquisitions etc.

I’m a bit of a simpleton when it comes to valuations

Rawz

23-05-2024, 03:00 PM

DarkHorse

23-05-2024, 09:03 PM

the reason why ebitda is the one to watch is because the ATMs are depreciated so quickly vs their actual life. I dont have my head around it all and need to wait for the final report. But basically FND have told us they will last 12 years but for whatever reason they are depreciated as if they last 5-6 years.

Plant and equipment $41,593k
Depreciation $9,847k

Good point. If we halve depreciation to reflect actual rather than accounting value, and consider net cash, EV/E multiple is only 15x, but some adjustment needed for minority interests. With one contract covering current earnings for at least 4 years, strong top and bottom line growth is almost guaranteed.

Rawz

24-05-2024, 01:27 PM

Good point. If we halve depreciation to reflect actual rather than accounting value, and consider net cash, EV/E multiple is only 15x, but some adjustment needed for minority interests. With one contract covering current earnings for at least 4 years, strong top and bottom line growth is almost guaranteed.

yes this is how i see it as well. Earnings will grow with any new contracts, flagged transaction fee increase and flagged acquisitions as the market consolidates. Then there is findi-pay which is you- the dark horse :cool: findi-pay has huge potential.

So 15x estimated multiple is not unreasonable for now even though management are telling us compared to their listed competitors FND is way undervalued.

Looking forward to guidance which will be issued in a few weeks. Then looking forward to seeing how the rest of the year plays out.

Chairman Smedley is a major shareholder and working hard to maximize our returns

Sideshow Bob

27-05-2024, 02:40 PM

Not having a good day today......down 11% currently on perhaps slightly higher than average volume.

No news I can see but something must have spooked some holders?

Rawz

27-05-2024, 03:18 PM

Not having a good day today......down 11% currently on perhaps slightly higher than average volume.

No news I can see but something must have spooked some holders?

I feel likes its been volatile since the white label announcement took the SP down to $2.50? Then up to $3.90 on FY numbers now down to $3.50. FY25 guidance coming up soon. Cant see any reason to sell until that drops.

Sideshow Bob

27-05-2024, 03:53 PM

I expect it is just noise - intraday it can be up/down close to 10% through the day.

Sideshow Bob

27-05-2024, 04:04 PM

Bigger trade (about 48k) just went through at about $3.20

Rawz

27-05-2024, 04:21 PM

I tried googling ATM india, TSI india, FND india lol... nothing popping up. Not sure what's going on...

Sideshow Bob

28-05-2024, 10:17 AM

Nothing revealing on HC.....best explanation was the below:

I think you're right though that it probably isn't someone selling with inside knowledgeable. The volume is too low and remaining sell orders too small to suggest someone big seeking to exit, but the selling has also been so aggressive today that those selling/sold seemed determined to exit or possibly also the trading today has triggered a series of stop loss orders.

Rawz

28-05-2024, 06:20 PM

This trading makes no sense to me. I’m not sure what games are being played but it just looks and feels very strange

Rawz

01-06-2024, 10:53 AM

Hopefully get the FY25 guidance next week sometime. I’m expecting a material uplift in ebitda.

Rawz

03-06-2024, 06:44 PM

Good day today with FY25 guidance just around the corner 👀

Rawz

03-06-2024, 11:28 PM

Incredible write up about Findi:

https://dmxam.com.au/blogs/findi-a-research-trip-to-india/

In it they discuss a potential $1b TSI market cap when it lists on the Bombay exchange in 2026. FND own 80% of TSI so FND worth $800m or 4x from here.

Explains the big jump today

Sideshow Bob

04-06-2024, 01:34 PM

Thanks for sharing Rawz.

I was reading in one of their recent updates that they had had to trim their FND position with the increasing share price, in order to keep their portfolio in balance under their rules.

The opposite of the old mantra of "cut your losers, let your winners run....'

Rawz

04-06-2024, 02:03 PM

Yes DMX have been trimming all the way up. Im pretty sure i remember reading they started trimming at under $2 per share... so they have left a lot of money on the table. They cant let it run like we can. Must think about diworsification.

Sideshow Bob

04-06-2024, 03:05 PM

Rawz

07-06-2024, 12:49 PM

Announcement (stocknessmonster.com) (https://stocknessmonster.com/announcements/fnd.asx-3A643938/)

AICC Fintech Australia presentation from Findi. Notice a big change from previous presentations. this time there is a big focus on FINDI-Pay. Not a lot about the ATM side of the business.
This follows the DMX India tour and blog about the valuation difference TSI will achieve when it lists on the Bombay stock exchange as a full service financial hub vs ATM business.

FY23 number of merchants 8,773
FY24 number of merchants 28,111
FY25 number of merchants 60,000 (guidance)

FY25 guidance must be coming next week.
Happy holder

Sideshow Bob

09-06-2024, 01:16 PM

Released after market close Friday. Look forward to Monday morning.....

Rawz

10-06-2024, 10:09 AM

Released after market close Friday. Look forward to Monday morning.....

It came out Thur. Which probably explains big jump friday.

We must be getting FY25 guidance this week anyway. So no doubt more good news for the up cycle to continue :t_up:

Sideshow Bob

10-06-2024, 12:08 PM

It came out Thur. Which probably explains big jump friday.

We must be getting FY25 guidance this week anyway. So no doubt more good news for the up cycle to continue :t_up:

Thanks Rawz - looked at the time not the date! :sleep:

Kings Birthday in most of Oztrayla today, so market closed.

Rawz

19-06-2024, 01:48 PM

https://stocknessmonster.com/announcements/fnd.asx-3A644576/

Another good investor presentation from FND. Basically, talking about where they have come from and where they are heading. Includes valuation scenarios putting FND on a very low multiple compared to its industry peers. Nothing in there about FY25 guidance unless i missed it, just skimmed through as im busy at work. Will read in full tonight.

SP up 7% today

Rawz

19-06-2024, 04:24 PM

oh my $4 team :t_up::cool:

Up 51 cents today. Thats a 51% one day gain on my original investment at the start of the year. wtf thats insane

winner69

19-06-2024, 04:50 PM

oh my $4 team :t_up::cool:

Up 51 cents today. Thats a 51% one day gain on my original investment at the start of the year. wtf thats insane

Keep with it mate …I should have listened to you a few months ago

Daytr

19-06-2024, 05:05 PM

Keep with it mate …I should have listened to you a few months ago

Agreed. What's your current assessment on growth etc RAWZ?

Sideshow Bob

19-06-2024, 09:20 PM

oh my $4 team :t_up::cool:

Up 51 cents today. Thats a 51% one day gain on my original investment at the start of the year. wtf thats insane

Not sure what I’ve been doing today but hadn’t realised until logged in and saw your post.

Awesome!! Well done mate!! :p:t_up::p

I had been thinking about buying a few more in the $3.50’s…..look like I missed that boat!! :cool:

Rawz

20-06-2024, 01:48 AM

Agreed. What's your current assessment on growth etc RAWZ?

I’m waiting for FY25 guidance. Ebitda should be 20-30% up on FY24. Maybe they low ball us and save room for upgrades.. fair value is then 8-10x the new ebitda guidance.

White label will drive the ATM business strongly. Then there is potential for new contract wins, flagged acquisitions and ATM fee increases by the Indian reserve bank. ATM business is a strong cash cow.

FINDI-Pay is targeting a 150% increase in merchant numbers. This has been flagged as adding materially to top line.. no mention of bottom line so maybe we assume it’s not adding much to profitability yet. Need to see the AR. Findi-pay is very exciting and if successful will help achieve these 20x ebitda multiples being thrown around..

We will know more when guidance comes

Daytr

20-06-2024, 09:15 AM

I’m waiting for FY25 guidance. Ebitda should be 20-30% up on FY24. Maybe they low ball us and save room for upgrades.. fair value is then 8-10x the new ebitda guidance.

White label will drive the ATM business strongly. Then there is potential for new contract wins, flagged acquisitions and ATM fee increases by the Indian reserve bank. ATM business is a strong cash cow.

FINDI-Pay is targeting a 150% increase in merchant numbers. This has been flagged as adding materially to top line.. no mention of bottom line so maybe we assume it’s not adding much to profitability yet. Need to see the AR. Findi-pay is very exciting and if successful will help achieve these 20x ebitda multiples being thrown around..

We will know more when guidance comes

Much appreciated. Will take a closer look.

sb9

20-06-2024, 06:40 PM

Not sure what I’ve been doing today but hadn’t realised until logged in and saw your post.

Awesome!! Well done mate!! :p:t_up::p

I had been thinking about buying a few more in the $3.50’s…..look like I missed that boat!! :cool:

Was looking to top up around that range, bugger it just raced away in last few day too rapidly. At this rate could well get into 5s range soon. Per Hotcopper, looks like MST are quite keen this one, must be the reason for big moves over last couple of days.

Rawz

21-06-2024, 10:54 AM

Me too Bob and sb9. Had $14k in my sharesies account looking for a home and when the SP dropped below $3.40 i was going to put it in for some more shares but didnt for whatever reason.

MST access has put a new valuation of $5.43. You can access the free research here: Research Notes - MST Access (https://www.mstaccess.com.au/research-notes) you just need to create a login.

FY24 result: Revenue of $66.5m (+22% pcp) was largely in line and EBITDAof $27.4m (+63%) was a strong beat against guidance of $24.0m (and vs ourown estimate of $24.9m). We note the result did not include the full impact ofthe CBI contract rollout, which will provide added benefit to FY25.

Balance sheet strength to support digital strategy: the strong resulthighlights the margin and cash flow benefit being achieved as the companyscales its ATM and merchant footprint (now ~49k as last reported), the latterof which is particularly key to Findi's digital strategy. FindiPay is currently only~10% of revenues vs management's longer-term goal of 30%.

Upgrades to earnings outlook drive valuation upgrade: we have bumpedour revenue and EBITDA expectations for FY25, but more meaningfullyincreased our forecasts for FY26 (refer to financial summary), once the fullimpact of the expected White Label ATM license and SBI rollout is realised.We await further FY25 guidance in the coming weeks.

Investment Thesis

Only Australian-listed way to gain access to Indian fintech market: Asone of the world’s largest non-bank ATM operators in a very large market,Findi services >2.7m customers daily in India across >49k locations, involvingboth ATMs and merchants. We expect this footprint to continue growingalongside population growth (from 1.4 bn currently), a reduction in theunbanked population (estimated at ~25% presently) and further adoption ofdigital payments, even while cash remains king.

Leveraging ATM & merchant stronghold to cross sell digital services:Findi is uniquely positioned as an end-to-end provider (the only fintechprovider that provides both ATMs and digital services) that can leverage itsbasic cash services, as a cheap customer acquisition channel, to furtherdevelop into a full-service digital banking provider. Both business segmentsprovide significant diversification benefits across cash and digital.

Current earnings multiple highlights value on offer: Applying aconservative market multiple of 10.5x to our updated FY25 EBITDA forecastof $32.4m results in a valuation significantly higher than the current shareprice.

Valuation

Findi’s earnings outlook underpins our valuation based on a 10-yearDCF and market EBITDA multiple (equally weighted). Our valuation of$5.43/share (up from $4.31) is supported by growth in Findi’s ATM networkand services which should drive revenue and profitability.

Risks

Key risks to our thesis include macroeconomic risk (related to Indianeconomic health), regulatory risk (which govern Findi’s ability to providepayment services), management execution risk and key client risk.

Rawz

21-06-2024, 10:57 AM

https://www.youtube.com/watch?v=8xCJDUtrWSE

WORTH A WATCH

Sideshow Bob

24-06-2024, 01:20 PM

https://www.youtube.com/watch?v=8xCJDUtrWSE

WORTH A WATCH

Thanks for sharing Rawz. Will give this a watch......

Away again this today......!! :)

Almost better than the Blues winning the Super Rugby title!! :eek2:

Rawz

24-06-2024, 01:32 PM

Thanks for sharing Rawz. Will give this a watch......

Away again this today......!! :)

Almost better than the Blues winning the Super Rugby title!! :eek2:

Lol 20 years without a title is tough to beat..
I prefer the title than the FND gains lol. I can make plenty more money but could be another 20 years of pain watching the blues :p

That MST access report on FND is also worth a read. Very detailed this time. The analysist(s) went on the trip to India along with our friends at DMX.

From the report:

Valuation of $5.43/Share Implies 50% Upside

Base-case valuation: Discounted cash flow (DCF) and EBITDA multiple weighted equally

We upgrade our valuation for Findi based on a DCF and market-based EBITDA multiples basis (both equally weighted) to $5.43 per share (prev $4.31 per share).

On a standalone basis, our DCF valuation is now $5.50 per share (vs $4.48 prev), over our forecast period out to FY34. Given the long-dated assumptions underlying the DCF, it is useful to bench mark this against a market multiple, hence our decision to weight our DCF and market multiple valuations equally.

Our market multiples–based valuation is $5.36 per share (vs $4.13 prev). We apply a 5-year averageASX300 EBITDA multiple of 10.5x to our FY25 estimate of EBITDA for Findi of $32.4m.

Findi has 48.8m shares on issue and 9.5m total options (exercisable at $0.90 per share and $2.00 per share) with various vesting dates, which we assume will issue giving a fully diluted share count for our valuation of 58.3m shares. The vast majority of options on issue are held by Findi’s directors, providing incentive alignment between both management and performance of the company.

.....

50% of base-case valuation = market comparison using EBITDA multiples

Peer group provides interesting comparison… The peer group that we use for Findi is based on industry background, primary activity and global comparables, particularly those directly involved with financial services in India. We provide summary descriptions of each company in Figure 14 below.

…but we use the market EBITDA multiples as a key valuation input. Direct comparison of Findiwith a peer group (by way of business type, function and size) is difficult, particularly given the various revenue segments and strengths of different peers. There is also limited consensus estimate data forthe next fiscal year, although an average of Infibeam Avenues and CMSInfo Systems for FY24e gives a multiple of 17.4x (see Figure 14 – below).

To overcome the challenge of limited available data and the difficulties associated with direct comparison, we apply a more general market approach by referencing the 5-year average EV/EBITDA multiple for the ASX300 of 10.5x (more conservative than the average peer multiple of 17.4x), which leads to a valuation of $5.36, marginally below our DCF valuation.

We note the multiple we apply above is largely in line with the multiple applied to FY23 EBITDA for the Pirimal Alternatives deal in mid-November, when Findi announced that its Indian subsidiary, TSI India, raised $37.6m via placement of Compulsory Convertible Debentures (CCDs) to Pirimal. These CCDs must be converted to equity when TSI India (Findi’s 100%-owned subsidiary, expected to be rebranded under the Findi name) lists on the Bombay Stock Exchange in the future as planned. The CCDs include an annual coupon payment of 8% and call option to buy back the securities at a committed IRR of 18%. If the call option is not exercised before listing, the CCDs will convert to approximately 16.7%of the company once converted to equity. This implies a total market cap upon IPO for TSI India of~$225m, which provides additional upside compared to the stated pre-IPO market capitalisation of$153m (post money $190.6m) based on an FY23 EV/EBITDA multiple equivalent to ~9x (FY23EBITDA was $16.8m).