Aptus Value Housing Finance Limited saw its initial public offering (IPO) open on Tuesday. The public issue saw a healthy amount of participation from its investors who had in total subscribed to the IPO 0.24 times by the end of the first trading day. Out of all the investor categories, the individual retail investors had the most subscriptions with the category having subscribed a total of 0.33 times. The qualified institutional buyers (QIBs) were second in line, as they had subscribed to the issue around 0.25 times or 25 per cent of their allotted shares. The non-institutional investors for the issue had subscribed 0.01 times against their allotted shares for the Aptus Value Housing Finance IPO.
By days end the issue received bids for 13,083,210 equity shares against the issue size of 55,128,500 equity shares. The company managed to raise around Rs 34 crore from its 21 anchor investors on Monday before the issue opened up for subscriptions. This was done by allocating 23,626,500 shares at Rs 353 per share.
In terms of the market lot size, the Aptus Value Housing Finance IPO had a minimum of 42 shares and an application cut-off amount of Rs 14,826. On the higher end of the market lot, the issue had 546 shares with an application amount of Rs 192,739. The retail investors for the issue were allowed to apply for 14 lots at the upper limit of the market lot size.
The grey market premium (GMP) for the Aptus Value Housing Finance IPO was at Rs 0.00 on Wednesday. This was the same as the previous day when the issue opened. The indicated that the issue was performing poorly on the unlisted grey market.
The IPO had an issue size of 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 aggregated up to Rs 2,280.05 crore with 64,590,695 equity shares. The public offer had listed its price band at Rs 346 to Rs 353 per equity share with a Rs 2 per equity share as the face value.
Should you Subscribe to the Aptus Value Housing Finance IPO?
Aptus Value Housing Finance Limited is one of the largest housing finance companies in South India in terms of assets under management (AUM). It has a strong network of 181 branches that span over 75 districts as well as the Union Territory of Puducherry. It also has an established financial performance track record with robust credit risk management. This combined with the fact that it maintains its presence in a largely unpenetrated market, gives it strong growth potential.
Speaking on the outlook of the industry and market, Geojit said, “The Indian housing finance market clocked a healthy CAGR of approximately 12% (growth in loan outstanding) over FY18 to FY21 on account of a rise in disposable income, healthy demand emanating from smaller cities and markets, attractive interest rates and government impetus on housing. In the past also, the housing finance market has shown secular growth with outstanding loans increasing from Rs. 9.9 billion as of FY15 to Rs 16 trillion as of FY18, translating into a CAGR of 17.4%.”
There are certain concerns, however, regarding the risks that the company could face. AngleOne said in a note, “Pandemic like Covid-19 could affect company’s business, operations and financial conditions. Any disruption in sources of capital could have an adverse effect on the business, results of operations and financial condition. The inability to meet obligations, including financial and other covenants under debt financing arrangement. NHB’s consent to undertake the Offer is subject to certain conditions." Having said that, AngleOne did recommend a ‘Subscribe’ rating for the issue based on its strong growth prospects and industry-leading return ratios that make it a strong contender.