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homemarket NewsAptus Value Housing Finance IPO opens. Here are key things to know

Aptus Value Housing Finance IPO opens. Here are key things to know

The Aptus Value Housing Finance IPO comprises fresh issuance of shares worth Rs 500 crore and and offer for sale (OFS) of shares worth Rs 2,234.84-2,280.05 crore by promoters.

By Abhishek Kothari Aug 10, 2021 10:24:04 AM IST (Updated)

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Aptus Value Housing Finance India's initial public offer (IPO) to raise up to Rs 2,780 crore opened for subscription on Tuesday. The IPO comprises fresh issuance of shares worth Rs 500 crore and offer for sale (OFS) of shares worth Rs 2,234.84-2,280.05 crore by promoters. The public offer will close on Thursday, August 12.

Here are the key things to know about the Aptus Value IPO:

The IPO is a combination of fresh issuance of shares and an offer for sale by promoters.

Promoters: M Anandan, 71, also CMD of the company; Padma Anandan, 62

Investor quota: While 50 percent of the issue is reserved for qualified institutional buyers (QIB), 35 percent is for retail investors. A quota of 15 percent is kept for non-institutional investors.

Issue price: The company has set a price band of Rs 346-353 for the public offer.

Lot size: Shares will be offered in multiples of 42. At the upper end of the price band, one lot will cost investors Rs 14,826.

MCap: The company is expected to command a market value of Rs 17,157-17,494 crore after the issue.

After the fund-raise, the company’s price/book value (P/BV) ratio would be 6.92x and 7.06x at the lower and upper end of the price band respectively

Book Running Lead Managers/Registrar: ICICI Securities, Citigroup Global Markets India, Edelweiss Financial Services and Kotak Mahindra Capital Company are the BRLMs to the issue, and KFin Technologies is the registrar.

Company profile: Aptus started operations in June 2010 as a retail affordable housing financier. The company lends to the low-ticket, high-yield segment, and targets low- and middle-income self-employed customers in rural and semi urban markets. It also targets first-time homebuyers. The company's portfolio comprises of purchase and self construction of residential property, home improvement and extension loans, loans against property and business loans.

Aptus operates from a network of 190 branches covering over 75 districts spread across the states of Tamil Nadu, Andhra Pradesh, Telangana and Karnataka, of which, a 52 percent loan book is from Tamil Nadu.

Shareholding Pattern: Pre-IPO

Name	Holding
WestBridge Crossover Fund	35.67%
M Anandan	19.98%
JIH II LLC	8.69%
Padma Anandan	5.19%
Aravali Invt Holdings	4.11%
Malabar India Fund	4.06%
Malabar Select Fund	3.83%
Madison India Opportunities	3.65%
Steadview Capital Mauritius Ltd	3.35%
SCI Investments VI	3.32%
GHIOF Mauritius	2.08%
A R Chadha & Co India Pvt Ltd	1.26%
M A Alagappan	1.22%

SWOT analysis

Strength	Weakness
ROBUSTLY CAPITALISED	Concentration risk: Tamil Nadu and Andhra Pradesh form ~80% of AUM
Strong spreads & NIMs compared to peers	4%-5% collections are digital
Niche focus ensures low dependency on govt actions
Opportunities	Threats
Affordable housing segment provides huge opportunity to grow	Loan growth has largely been in last 2-3 years
	Unseasoned exposure of the book
	Ticket size is on lower side at Rs7.5 lakh only
	Pricing power sustainability along with low NPAs is difficult
	Volatility into 30+ days past due is higher compared to peers & PCR is low
	Private equity dominate shareholding (founding promoter is old)

Peer Comparison

FY21	Aptus	Aavas	Home First Fin
AUM, Rs cr	4,070.00	9,454.30	4,141.10
ROE, %	14.47	12.91	8.7
ROA, %	6.46	3.49	2.5
NIM, %	10.1	7.71	4.7
CRAR	73.63	54.54	56.2
GNPA, %, Q1FY22	2.00#	1.14	1.8
Rating	A+/Stable ICRA	AA-/Stable ICRA	A+/Stable ICRA
P/BV, FY21	7.06*	7.35	3.29
*BV includes IPO proceeds
#GNPA as of 10th July’21

Key financials

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