Aptus Value Housing Finance Limited closed its second day of subscription for the company’s initial public offering (IPO) on Wednesday. The second day of the public issue saw the IPO subscriptions climb to 0.37 times the shares of the public issue. Out of all the investor categories, it was the retail investors and the qualified institutional buyers (QIBs) that had subscribed the most. The retail investors took the top spot with a subscription of 54 per cent or 0.54 times that of their allotted shares for the issue. The QIBs on the other hand subscribed to the Aptus Value Housing Finance IPO around 33 per cent or 0.33 times that of their allotted shares. The non-institutional investors (NIIs) had subscribed to the public issue around 0.06 times.
The IPO received bids for 2.06 crore equity shares against an IPO size of 5.51 crore equity shares. The company had also mobilized around Rs 834 crore from the anchor investors, a day before the issue opened.
On August 12, the grey market premium (GMP) of the Aptus Value Housing Finance IPO was Rs 25. This indicated that the shares were trading at a premium of Rs 371 to Rs 378 per equity share on the unlisted grey market. That marks a 7 per cent higher price compare to the upper end of the price band.
The Aptus Value Housing Finance IPO had a minimum of 42 shares with a minimum application amount of Rs 14,826. The upper limit of the market lot size was 546 shares with Rs 192,739 as the application cut-off amount. From this lot, retail investors were allowed to apply for 14 lots at the upper maximum of the lot size.
The IPO had an issue size o Rs 2,780.05 crore with a fresh issue and an offer for sale (OFS). The fresh issue stood at Rs 500 crore while the OFS aggregates up to Rs 2,280.05 crore. The OFS also consisted of 64,590,695 equity shares with a Rs 2 per share face value. The price band of the issue was Rs 346 to Rs 353 per equity share. The issue opened on August 10 and will come to a close on August 12.
Should you Subscribe to the Aptus Value Housing Issue?
Speaking on the position that Aptus Value Housing Finance Limited maintains in the market, Geojit said in a note, “Incorporated in 2009, they are one of the largest housing finance companies in south India in terms of AUM, as of Q4FY21. The Gross Loan Assets have grown at a CAGR of 34.54% from Rs.2247.2cr, in FY19 to Rs.4067.8cr, in FY21. As of FY21, they conduct the operations in the states of Tamil Nadu (including the union territory of Puducherry), Andhra Pradesh, Karnataka and Telangana through 190 branches.”
The company mainly focuses on offering home loans to retail customers so that they can purchase homes, make residential improvements and extensions or even build a home. The business also offers other services such as loans against property and business loans. In essence, it undertakes a wide variety of lending activities and provides relevant services such as sourcing, underwriting, valuation, and legal assessment of collateral, credit assessment, and collection.
Adding to the future outlook of the company, Geojit said, “Despite its focus on low and mid-income group, AVHFIL was able to keep slippages under control resulting in lower NPA levels. As on FY21, the Gross NPAs were 0.68%, while the Net NPAs were 0.49%. They intend to expand the branch networks to Maharashtra, Odisha and Chhattisgarh along with deeper penetration in the existing markets with an average addition of 30 branches per year.”
“We assign a “Subscribe” rating for the issue on a long-term basis considering its strong return ratios, impressive growth and attractive margins,” added Geojit.