Nine things to know about Aptus Value Housing Finance IPO

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Housing finance company, Aptus Value Housing Finance plans to raise Rs 2780.05 crore through its IPO (initial public offer) that is slated to open on August 10. Check, price band, lot size, open & close date, issue size, financial and other details for the issue.

Open and close date: The offer will open for subscription on August 10 and the bidding will close on August 12. The anchor book, if any, will open for a day before the issue opening, i.e. August 9.

Price band: The price band for housing finance company has been fixed at Rs 346-353 per share having a face value of Rs 2 per share.

Lot size: Investors can bid for a minimum of 42 equity shares and in multiples, thereafter, translating to a minimum bidding amount of Rs 14,826 at the higher end of the price band. A retail investor can at max apply for 13 lots or 546 shares for Rs 1,92,738.

Issue size: The Rs 2,780.05-crore public offer comprises fresh issuance of equity shares of Rs 500 crore, and an OFS (offer for sale) of Rs 2,280.05 crore by existing selling shareholders including promoter Padma Anandan, and investors Aravali Investment Holdings, JIH II LLC, GHIOF Mauritius, and Madison India Opportunities IV.

Promoters M Anandan, Padma Anandan, and WestBridge Crossover Fund LLC held 60.84% stake in the company, while selling investors Aravali Investment Holdings, JIH II LLC, GHIOF Mauritius, and Madison India Opportunities IV held 18.53% shareholding in the company.

Objective of issue: The NBFC (non banking finance company) will utilise the net proceeds from the fresh issue towards augmenting tier I capital requirements.

What’s in it for retail investors: Not more than 50% of the total offer has been reserved for qualified institutional buyers, up to 35% for retail investors, and the rest 15% for non-institutional buyers.

About the company: Aptus Value Housing is a retail-focused housing finance company that primarily serves low and middle-income self-employed customers in the rural and semi-urban markets of India. As per the CRISIL report, it is one of the largest housing finance companies in South India in terms of AUM (asset under management) of Rs 3,790.93 crore as of December 31, 2020.

The company offers home loans to retail customers to purchase homes, construct residential property, house improvement and extension, loans against property, and business loans. It undertakes all types of lending activities such as sourcing, underwriting, valuation, and legal assessment of collateral, the credit assessment, and collection.

On the financial front, the company reported a profit after tax of Rs 266.94 crore compared to Rs 111.48 crore in FY19. Since its inception, the company has not restructured any loans or written off any loans receivable. Upon listing Aptus Value Housing will join peers Aavas Financiers. Aavass trades at a P/E (price to earnings) of 67.44x while Aptus Value Housing, on the upper end of the price band, would command a P/E ratio of 63.49x.

Book running lead managers and registrar to the IPO: The book running lead managers to the issue are ICICI Securities, Citigroup Global Markets, Edelweiss Financial Services, and Kotak Mahindra Capital Company. The registrar to the issue is KFintech.

Issue timeline: The issue is likely to finalize the basis of allotment by August 18, and the initialization of refunds will take place by August 20. While the credit of equity shares to depository accounts of the allottee will be done on August 23. The company is expected to make its stock market debut on August 24, 2021.