Aptus Value Housing Finance Limited opened its initial public offering (IPO) on Tuesday. The public issue saw good participation from its investors, who subscribed 0.24 times to the IPO by the end of the first trading day. Out of all the investor categories, the category of individual retail investors had the highest membership with 0.33 times the total subscription. Qualified Institutional Buyers (QIBs) were at number two as they subscribed to the issue by about 0.25 times or 25 per cent of their allotted shares. Non-institutional investors had subscribed 0.01 times of their allotted shares for the issue Aptus Value Housing Finance IPO.
At the end of the day, the issue received bids for 13,083,210 equity shares against the issue size of 55,128,500 equity shares. The company on Monday managed to raise around Rs 34 crore from its 21 anchor investors before the issue opened for subscription. This was done by allotting 23,626,500 shares at Rs 353 per share.
In terms of market lot size, Aptus Value Housing Finance IPO had a minimum of 42 shares and the application cut-off amount was Rs 14,826. At the upper end of the market lot, the issue had 546 shares with an application amount of Rs 192,739. For the issue, retail investors were allowed to apply for 14 lots subject to the upper limit of the market lot size.
The gray market premium (GMP) for Aptus Value Housing Finance IPO was Rs 0.00 on Wednesday. It was the same as the previous day when the issue was open. This indicated that the issue was performing poorly in the unlisted gray market.
The issue size of the IPO with fresh issue and offer for sale (OFS) was Rs 2,780.05 crore. The fresh issue stood at Rs 500 crore while the OFS stood at Rs 2,280.05 crore with 64,590,695 equity shares. The public offering had listed its price band from Rs 346 to Rs 353 per equity share with Rs 2 per equity share as the face value.
Should you subscribe to 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 spread over 75 districts as well as the Union Territory of Puducherry. It also has an established financial performance track record with strong credit risk management. This, combined with the fact that it maintains its presence in the largely impenetrable market, gives it strong growth potential.
Speaking on the industry and market outlook, Geojit said, “Indian housing finance market witnessed a healthy CAGR of around 12% (increase in loan outstanding) from FY2018 to FY21, driven by growth in disposable income, healthy demand was due to increase. Government incentives on smaller towns and markets, attractive interest rates and housing. In the past too, the housing finance market has shown secular growth with outstanding loans rising from Rs. 16 trillion by FY18 from 9.9 billion by FY15, translating to a CAGR of 17.4%.
However, there are some concerns about the risks the company may face. AngleOne said in a note, “Pandemics such as COVID-19 may impact the business, operating and financial conditions of the Company. Any disruption in the sources of capital may have an adverse effect on the business, results of operations and financial position. Inability to meet obligations, including financial and other contracts, under debt financing arrangements. NHB’s consent to initiate the proposal is subject to certain conditions.” Having said this, Anglevan recommended a ‘subscribe’ rating for the issue based on its strong growth prospects and industry-leading return ratio, which gives it a ‘subscribe’ rating. Makes a strong contender.
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