Shares of Aavas Financiers dip 6% to Rs 771 on stock market debut

Shares of Aavas Financiers, a firm focused on providing housing loans to low- and middle-income groups in semi-urban and rural areas, ended six per cent below IPO price during their stock market debut on Monday. Shares of the company closed at Rs 771 compared to the issue price of Rs 821. The stock dropped as much as 13 per cent to Rs 710 intra-day on the National Stock Exchange (NSE), where Rs 2.7 billion worth of shares were traded.    

Market players said the listing day performance wasn't bad considering the meltdown in the market -- and non-banking stocks in particular -- seen this month.   

Aavas Financier's Rs 17.3-billion IPO, which closed on September 27, had garnered only 97 per cent subscription. Through the IPO, the Rajasthan-based housing finance company issued fresh shares worth Rs 4 billion. Private equity firms Lake District, Partners Group and Kedaara Capital also sold part of their holdings in the IPO. At current market rate, the company is valued at Rs 60 billion. Analysts say the price-to-book value of the company is more than its listed peers.