FINDI (FND) Indian ATM and Fintech business

[percy]

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]

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]

thanks rawz
DMX are well worth watching

[Sideshow Bob]

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

[Rawz]

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]

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]

Jeepers might do $2 today

[Rawz]

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]

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]

Jeepers might do $2 today

2 bucks and change