Aptus Value Housing Finance makes weak debut, lists 7% below issue price

The stock got listed at Rs 329.95, a 7 per cent discount to the issue price of Rs 353 on the BSE

Housing finance company Aptus Value Housing Finance India has made a disappointing debut on the bourses as its shares got listed at Rs 329.95, a 7 per cent discount to its issue price of Rs 353 on the BSE on Tuesday. On the National Stock Exchange (NSE), the stock opened at Rs 333, 6 per cent below its issue price.

At 10:02 am, the stock was trading at a discount of 2 per cent to the issue price at Rs 343.25 after hitting a high of Rs 344 in intra-day trade post listing on the BSE. In comparison, the S&P BSE Sensex was up 0.05 per cent at 55,581 points. A combined 14 million equity shares had changed hands on the counter on the NSE and BSE so far.

The initial public offering (IPO) of Aptus Value Housing Finance India had received a strong response from the investors with the issue receiving 17.2 times subscription. The non-institutional investors and qualified institutional buyers (QIBs) portion was subscribed by 33.91 times and 32.41 times, respectively, while the portion for retail individual investors was subscribed 1.35 times, data shows.

The company proposes to utilise the net proceeds from the offer for augmenting equity capital base to meet future capital requirements arising out of growth in business.

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 a CRISIL report, it is one of the largest housing finance companies in South India in terms of assets under management (AUM) of 37,909.31 million 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. The company does not provide any loans to builders or for commercial real estate.

It normally targets first time home buyers where the collateral is a self-occupied residential property. The company does not provide any loans with a ticket size above Rs 25 lakh and the average ticket size of home loans, loans against property and business loans on the basis of disbursement amounts was Rs 7.2 lakh, Rs 7.1 lakh and Rs 6.2 lakh as of FY21, respectively.

Going forward, the brokerage firm Ventura Securities expects Aptus’ AUM to grow at a 29.7 per cent CAGR over FY21-24E while NII/operating profit/PAT is expected to grow at a CAGR of 22.5 per cent/ 24.1 per cent/ 23.5 per cent to Rs 790.9 crore / Rs 671.5 crore/ Rs 502.3 crore, respectively. We expect asset quality to be more or less stable with FY24 GNPA and NNPA at 0.9 per cent & 0.7 per cent of loan book respectively, the brokerage firm said in an IPO note.