The public offer of retail-focussed housing finance company Aptus Value Housing Finance India is subscribed 5.58 times, garnering bids for 30.74 crore equity shares against IPO size of 5.51 crore equity shares on August 12, the final day of bidding, the subscription data available on exchanges showed.
The portion reserved for qualified institutional buyers witnessed 9.79 times subscription and that of non-institutional investors got subscribed 10.82 times.
Retail investors have put in bids for 93 percent of the portion set aside for them.
Incorporated in 2009, Aptus Value Housing Finance, which primarily serves low-and-middle income self-employed customers in rural and semiurban markets, launched its Rs 2,780.05-crore public offer for subscription on August 10, with a price band of Rs 346-353 per equity share. Of which, it already mobilised Rs 834 crore from anchor investors on August 9, a day prior to issue opening.
Aptus offers loans for purchase of home/self-construction of residential property and home improvement/extension. It also offers loans against property and business loans, having a network of 190 branches covering 75 districts mainly in southern states and the union territory of Puducherry.
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"The IPO is valued at 8.8x P/B of FY21, which looks to be reasonable compared to peers like Aavas Financiers, which trades at 8.5x of FY21 P/B. Notably, Aptus has maintained superior return on equity (RoE) and return on assets (RoA) of 13.5 percent and 6.5 percent, respectively in FY21," said Reliance Securities which recommended a subscribe to the issue.
Further, given strong capital base (capital adequacy ratio-CAR at around 74 percent), the brokerage believe Aptus is on firm footing to capitalize on the huge opportunities in housing/mortgage loan space. It believes sharp rise in gross non-performing assets (NPA) to 2 percent in July 2021 from 0.7 percent in March 2021 led by second Covid-19 wave is a near-term concern, which can ease with the recovery in economic activities.
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Its financial performance has been impressive on various counts, Reliance Securities feels. While its revenue clocked 40 percent CAGR over FY19-FY21 mainly aided by 35 percent CAGR in loan book and steady net interest margin (around 10 percent) over FY19-FY21, profit clocked 55 percent CAGR over the same period. Further, the company has been generating healthy return on assets (RoA) in the range of 6.5-7 percent.
Additionally, "credit cost at 0.14 percent and capital adequacy ratio (CAR) at 74 percent as on FY21 are impressive. Notably, decline is cost to income ratio to 21.8 percent in FY21 (from 30.3 percent in FY19) augurs well for Aptus," said the brokerage.
Investors traded Aptus shares at a premium of Rs 35 or 9.9 percent in the grey market compared to issue price of Rs 353 per share, the IPO Watch data showed.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Aptus Value Housing Finance IPO subscribed 5.58 times on the final day of bidding - Moneycontrol.com
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