{"id":900,"date":"2021-08-11T15:04:21","date_gmt":"2021-08-11T15:04:21","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=900"},"modified":"2021-08-11T15:04:22","modified_gmt":"2021-08-11T15:04:22","slug":"aptus-value-housing-finance-has-hit-the-primary-market-should-you-subscribe","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/aptus-value-housing-finance-has-hit-the-primary-market-should-you-subscribe\/","title":{"rendered":"Aptus Value Housing Finance has hit the primary market. Should you subscribe?"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div>\n<p>Rising demand of real estate for residential purpose after the pandemic of Covid-19 has pushed the demand of other sectors too. Aptus Value Housing Finance Ltd., 8<sup>th<\/sup> IPO in the month of August carries a promising story. What could be any better period of buying a home when cost of borrowing is lowest, stamp duty charges have been reduced and administration has released enough relief funds for the general public? The issue size of Aptus Value Housing Finance is a mix of fresh issue and offer for sale. Housing Finance company is looking to increase their Tier-1 capital requirements from net proceeds.<\/p>\n\n\n\n<p><strong>Aptus\nValue Housing Finance IPO Details<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Issuer Company: Aptus Value Housing Finance<\/li><li>Industry: NBFC<\/li><li>IPO Size: 2,780 cr.<\/li><li>Price Band: 346-353<\/li><li>Issue Open Date: 10 Aug, 2021<\/li><li>Issue Close Date: 12 Aug, 2021<\/li><li>Listing Date: 24 Aug, 2021<\/li><li>Minimum Lot Size: 42 shares<\/li><li>Face Value: 2 Rs. Per share<\/li><li>Employee Discount:&nbsp; <\/li><li>Retail Allocation: 35%<\/li><li>Listing Exchange: NSE, BSE<\/li><\/ul>\n\n\n\n<p><strong>Composition\nof Issue Size<\/strong><\/p>\n\n\n\n<p>The issue size of Rs. 2,780 cr. is a mix of fresh issue of Rs. 500\ncr. and offer for sale of Rs. 2,280 cr. at the upper price band. <\/p>\n\n\n\n<p>Offer for Sale: The object of the\nOffer for Sale is to allow Padma Anandan, Aravali Investment Holdings, Madison\nIndia Opportunities IV and others to sell an aggregate of up to 64.6 million\nequity Shares held by them amounting at Rs. 2,280 cr. The company will not\nreceive any proceeds from the Offer for Sale. <\/p>\n\n\n\n<p>Fresh Issue: The company has planned to raise fresh capital comprising an aggregate of 1,41,60,305 equity shares having Face Value \u20b92 aggregating up to Rs. 500 Cr at the upper price band of Rs. 353. The net proceeds will be utilized for augmenting the Tier-I capital requirements of the Company.<\/p>\n\n\n\n<p>Must Read: <a href=\"https:\/\/www.invest19.com\/blog\/car-trade-ipo-will-hit-the-primary-market-on-aug-09-should-you-subscribe\/\">Car Trade IPO will hit the primary market on Aug 09. Should you subscribe?<\/a><\/p>\n\n\n\n<p><strong>About\nthe Company<\/strong><\/p>\n\n\n\n<p>Aptus Value Housing Finance Limited is entirely retail\nfocused housing finance company primarily serving low and middle income\nself-employed customers in the rural and semi-urban markets of India. According\nto the CRISIL Report, the Company had the highest Return on Assets of 5.7%\namong the peers during the FY21. Aptus Value Housing is one of the largest\nhousing finance companies in south India in terms of AUM, as of March 31, 2021.\nThe AUM of the company have increased from \u20b922,472.33 million, as of March 31,\n2019 to \u20b940,677.62 million, as of March 31, 2021, at a CAGR of 34.54%.<\/p>\n\n\n\n<p>The company has implemented a robust risk management architecture\nwhich is reflected in their asset quality. They conduct all aspects of lending\noperations in-house including sourcing, underwriting, valuation and legal\nassessment of collateral and collections, which enables them to maintain direct\ncontact with their customers, reduces turn-around-times and the risk of fraud.\nOver years, the NBFC has studied and developed credit assessment models\nspecific to over 60 types of customer profiles.<\/p>\n\n\n\n<p>&nbsp;<strong>Industry Growth Drivers<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>India is one of the fastest-growing major economies\nwith second largest population.<\/li><li>Per capita income is forecast to improve\ngradually with pick up in GDP growth and sustained low inflation. As per IMF\nestimates, India\u2019s per capita income (at constant prices) is expected to grow\nat a CAGR of 6.7% from Fiscals 2020 to 2025.<\/li><li>As per the RBI housing finance committee report,\nthe average Indian household holds 77% of its total asset in real estate.<\/li><li>Stamp duty reduction in Maharashtra. The\ndecision was made to give some relief to consumers and boost sales of real\nestate that is expected to be followed by other states too.<\/li><li>Home loan enquiries have increased post the\nfirst quarter of Fiscal 2021 on the back of pent up demand, reduced interest\nrates and attractive schemes provided by developers.<\/li><li>Medium and small HFCs grew faster than overall\nHFCs, clocking 19.3% and 24.8% CAGR, respectively in FY21 and expected to grow\nfurther in coming years.<\/li><\/ul>\n\n\n\n<p><strong>Peers\nComparison<\/strong><\/p>\n\n\n\n<p>The company will face tough competition from Aavas Financiers\nLimited, Repco Home Finance, and Home First Finance in the listed space. Among\nthe listed players, Aptus Value claims lowest Cost to Income ratio at 24.53%\nwhile the cost of borrowings of the company is on higher side at 10%. Leading\nHFC has largest branch network in South region and promises highest Return on\nNet Worth at 13.49% amongst peers.<\/p>\n\n\n\n<p><strong>Financials<\/strong><\/p>\n\n\n\n<p><strong>Asset under\nManagement (Rs. in millions)<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"453\" height=\"295\" src=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-214.png\" alt=\"\" class=\"wp-image-902\" srcset=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-214.png 453w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-214-300x195.png 300w\" sizes=\"auto, (max-width: 453px) 100vw, 453px\" \/><\/figure>\n\n\n\n<p><strong>Observations<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Total AUM has been increased at a CAGR of 34.54%\nin last two years.<\/li><li>Aptus Value generates 51.7% of their revenues\nfrom disbursing home loans while Loans against property and Business Loans\ngenerates 22% and 26% respectively.<\/li><li>Revenues from Home Loans, Loans against property\nand Business Loans have increased by 26.5%, 53% and 14.75% respectively.<\/li><\/ul>\n\n\n\n<p><strong>Financial Statements<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"\"><tbody><tr><td>\n  Income Statement (In Millions.)\n  <\/td><td>\n  FY21\n  <\/td><td>\n  FY20\n  <\/td><td>\n  FY19\n  <\/td><\/tr><tr><td>\n  Interest Earned\n  <\/td><td>\n  6,238.89\n  <\/td><td>\n  4,852.29\n  <\/td><td>\n  3,108.87\n  <\/td><\/tr><tr><td>\n  Other Operating Income\n  <\/td><td>\n  127.26\n  <\/td><td>\n  150.97\n  <\/td><td>\n  129.64\n  <\/td><\/tr><tr><td>\n  Other Income\n  <\/td><td>\n  186.27\n  <\/td><td>\n  233.94\n  <\/td><td>\n  132.64\n  <\/td><\/tr><tr><td>\n  Total Income\n  <\/td><td>\n  6,552.42\n  <\/td><td>\n  5,237.20\n  <\/td><td>\n  3,371.15\n  <\/td><\/tr><tr><td>\n  Interest Expended\n  <\/td><td>\n  2,065.34\n  <\/td><td>\n  1,845.49\n  <\/td><td>\n  1,162.18\n  <\/td><\/tr><tr><td>\n  Net Interest Income\n  <\/td><td>\n  4,300.81\n  <\/td><td>\n  3,157.77\n  <\/td><td>\n  2,076.33\n  <\/td><\/tr><tr><td>\n  Operating expenses\n  <\/td><td>\n  1,058.40\n  <\/td><td>\n  1,278.25\n  <\/td><td>\n  1,961.56\n  <\/td><\/tr><tr><td>\n  Total Expenses\n  <\/td><td>\n  3,101.51\n  <\/td><td>\n  2,764.30\n  <\/td><td>\n  1,844.09\n  <\/td><\/tr><tr><td>\n  Profit before Taxes\n  <\/td><td>\n  3,450.91\n  <\/td><td>\n  2,472.90\n  <\/td><td>\n  1,527.06\n  <\/td><\/tr><tr><td>\n  Taxes\n  <\/td><td>\n  781.47\n  <\/td><td>\n  362.78\n  <\/td><td>\n  412.23\n  <\/td><\/tr><tr><td>\n  Net Profit for the Year\n  <\/td><td>\n  2,669.44\n  <\/td><td>\n  2,110.12\n  <\/td><td>\n  1,114.83\n  <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Company\u2019s interest income is increased by 41.66% in last two years.<\/li><li>Net Interest Income of the company stood at Rs. 4,300.81 million. Net Interest Margins have expanded from 9.90% to 10.10% in FY21.<\/li><li>Company\u2019s cost of borrowings has reduced from 10% to 9.13% but still at higher side among the listed peers.<\/li><li>Employee cost to income is reduced from 12.9% to 11.21%, which shows rising operational efficiency of the company.<\/li><li>Return on Net Worth of the company stands at 13.49%.<\/li><li>Company has reported highest disbursement of loans growth in last 4 years at 33% among the peers.<\/li><li>Asset under Management of the housing finance company is among the top five HFCs in India including Aadhar Housing Finance, Aavas Financiers, Repco Home Finance and Home First Finance as on FY21.<\/li><li>Return on Assets at 5.73% is highest among the peers.<\/li><li>Considering the upper price band at Rs. 120 and FY21 Earning Per Share (EPS) of Rs. 5.56, the company is demanding a P\/E multiple of 63.48x, similar to its listed peers.<\/li><\/ul>\n\n\n\n<p>Also Read: <a href=\"https:\/\/www.invest19.com\/blog\/chemplast-sanmar-has-hit-the-primary-market-should-you-subscribe\/\">Chemplast Sanmar has hit the primary market. Should you subscribe?<\/a><\/p>\n<div class='epvc-post-count'><span class='epvc-eye'><\/span>  <span class=\"epvc-count\"> 2,606<\/span><\/div><div class=\"pld-like-dislike-wrap pld-template-1\">\n    <div class=\"pld-like-wrap  pld-common-wrap\">\n    <a href=\"javascript:void(0);\" class=\"pld-like-trigger pld-like-dislike-trigger \" title=\"\" data-post-id=\"900\" data-trigger-type=\"like\" data-restriction=\"ip\" data-ip-check=\"0\" data-user-check=\"1\">\n                        <i class=\"fas fa-thumbs-up\"><\/i>\n                    <\/a>\n    <span class=\"pld-like-count-wrap pld-count-wrap\">3    <\/span>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Rising demand of real estate for residential purpose after the pandemic of Covid-19 has pushed the demand of other sectors too. Aptus Value Housing Finance [&hellip;] <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/www.invest19.com\/blog\/aptus-value-housing-finance-has-hit-the-primary-market-should-you-subscribe\/\">Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":903,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[70,2,7,10],"tags":[],"class_list":["post-900","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo","category-stock-market","category-investment","category-featured"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=900"}],"version-history":[{"count":1,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/900\/revisions"}],"predecessor-version":[{"id":904,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/900\/revisions\/904"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/903"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}