Aptus Value Housing Finance IPO – Issue Details and Review
Aptus Value Housing Finance India Ltd IPO (Aptus Value Housing Finance IPO) Details
Chennai based Aptus Value Housing Finance is coming up with IPO that would open for subscription on 10th August 2021. Aptus Value Housing India Limited is a retail-focused housing finance company which primarily serves low and middle-income self-employed customers in the rural and semi-urban markets of India. Company has posted strong and margins growth in the last 3 years. Should you invest in Aptus Value Housing Finance IPO? What are the risk factors in this IPO?
About Aptus Value Housing Finance India Limited
They are an entirely retail focused housing finance company primarily serving low- and middle-income self-employed customers in the rural and semi-urban markets of India. Company had the highest RoA of 5.7% among the Peer Set during the financial year 2021. They are one of the largest housing finance companies in south India in terms of AUM. Its AUM have increased from Rs 22,472.33 Mn as on 31-Mar-2019 to Rs 40,677.62 Mn as on 31-Mar-2021. Its gross NPAs expressed as a percentage of our Gross Loan Assets was 0.68%, 0.70% and 0.40% for years FY21, FY20 and FY19 respectively.
They offer customers home loans for the purchase and self-construction of residential property, home improvement and extension loans; loans against property; and business loans. They only offer loans to retail customers and do not provide any loans to builders or for commercial real estate. They target first time home buyers where the collateral is a self-occupied residential property.
Aptus Value Housing Finance IPO details
|IPO Opening Date||10-Aug-21|
|IPO Closing Date||12-Aug-21|
|Issue Type||Book Built Issue IPO|
|Face Value||Rs 2 per equity share|
|IPO Price band||Rs 346 to Rs 353 per equity share|
|Lot Size||42 Shares|
|Min Order Quantity||42 Shares|
|Listing at||BSE and NSE|
|Issue Size||Total Size: Rs 2,780.05 Crores
i) OFS: Rs 2,280.05 Crores
ii) Fresh Issue: Rs 500 Crores
What are Aptus Value Housing Finance India Limited competitive strengths?
1) It is one of the largest housing finance companies in South India in terms of AUM.
2) Company has strong network of 181 branches across 75 districts and union territory of Puducherry.
3) It has presence in large, underpenetrated market with strong growth potential.
4) It has robust credit risk management from origination to collections leading to assure strong asset quality.
5) company has established financial performance track record.
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What are the Objects of the Offer?
It has two objects of the offer for the IPO size of Rs 2,780.05 Crores.
1) Offer for Sale (OFS) Rs 2,280.05 Crores: Under OFS selling shareholders would sell the shares and company would not get any proceeds from the issue.
2) Fresh issue for Rs 500 Crores: Fresh issue would be utilized for the following:
i) To augment company’s capital base to meet future capital requirements.
ii) To meet issue related expenditures.
iii) To achieve share listing benefits on the stock exchanges.
Who is the promoter of Aptus Value Housing Finance India Limited?
M Anandan, Padma Anandan, and Westbridge Crossover Fund, LLC are the promoters of the company.
How is the company financial track record?
Here are the total assets, revenues and profits of the company in the last 3 years.
|Financial Year ending / Period ending (Amt in Mns)|
|Profit After Tax||1,114.8||2,110.0||2,669.4|
Why to invest in Aptus Value Housing Finance IPO?
Here are the positive factors in this company.
1) Aptus Value Housing is a retail-focused housing finance company which serves low and middle-income self-employed customers in the rural and semi-urban markets of India. It is the largest housing finance company in South India. Company has presence in large and unpenetrated market with strong growth potential.
2) Company posted strong revenue growth in the last 3 years. Its FY19, FY20 and FY21 revenues are at Rs 337.1 Crores, Rs 523.7 Crores and Rs 655.2 Crores respectively.
3) Company generated strong growth in profits in the last 3 years. Its FY19, FY20 and FY21 revenues are at Rs 111.4 Crores, Rs 211 Crores and Rs 266.9 Crores respectively.
Risk Factors in Aptus Value Housing Finance IPO
1) Current Covid-19 pandemic has adverse effects on its business. Such pandemics can affect in future too.
2) Company requires substantial capital for its business. Any disruption in its sources of capital can adversely affect its business.
3) Its inability to meet its obligations, including financial and other covenants under its debt finance arrangements could adversely affect its business.
4) NHB consent to undertake the offer is subject to certain conditions.
5) The risk of non-payment or default by loan borrowers may adversely affect its business.
5) Majority of its customers are first time borrowers which increase risks of non-payment or default.
6) Company is affected by volatility in interest for both its lending and treasury operations which could cause its net interest income to vary and consequently affect its profitability
7) Currently it has credit rating of “A” from ICRA and CARE. Any downgrade in its credit ratings can increase its borrowing costs and affect its ability to obtain financing. This can adversely affect company business.
8) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.
Aptus Value Housing Finance IPO dates for subscription, Allotment and Listing
|Finalization of Allotment||18-Aug-21|
|Initiation of Refunds||20-Aug-21|
|Credit to Demat Account||23-Aug-21|
|IPO Shares Listing Date||24-Aug-21|
Is Aptus Value Housing Finance IPO Price is underpriced or overpriced?
Its IPO price band is Rs 346 to Rs 353 per share.
1) On the upper price band of Rs 353 and last 3 years average EPS of Rs 4.83, the P/E ratio works out 73x.
2) If we take FY21 EPS of Rs 5.55, the P/E ratio works out 63.6x.
3) Means company is asking issue price in the P/E range of 63.6x to 73x.
4) Currently we have only one listed peer (who is in similar business) Aavas Financiers which is trading at 67.4x. While one cannot compare only with one company for IPO Price valuation purpose, considering P/E of 63.x to 73x, the IPO share price is fully priced.
What is Aptus Value Housing Finance IPO GMP?
Aptus Value Housing Finance IPO GMP is not yet known as we could not see any trades happening. GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about IPO price as it is unorganized market.
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Aptus Value Housing Finance IPO – Review and Recommendation
Aptus Value Housing Finance India Limited is the largest housing finance company in South India. It has presence in large and under penetrated market with strong growth potential.
It has posted strong revenue growth in the last 3 years.
Its has generated strong profit growth in last 3 years. If you observe, its margins are at 40% consistently in the last 2 years. Such high margins can always reward investors.
The IPO share price is fully priced.
Considering various positive factors indicted above, investors can invest in this IPO for short term, medium and long term.
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