Aptus Value Housing Finance IPO opens: Grey market premium weak; should you subscribe?

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Updated: August 10, 2021 11:46 AM

Aptus Value Housing Finance Rs 2,780.05-crore IPO has opened for subscription on Tuesday, at a price band of Rs 346-353 per share.

Aptus Value Housing Finance ipoAptus Value Housing Finance IPO will remain open for subscription till Thursday.

Aptus Value Housing Finance Rs 2,780.05-crore IPO has opened for subscription on Tuesday, at a price band of Rs 346-353 per share. On Monday, Aptus Value Housing Finance raised Rs 834 crore from anchor investors. The company has allocated 2.36 crore equity shares at Rs 353 apiece aggregating the transaction size to Rs 834 crore. Nomura, Copthall Mauritius Investment, Steadview Capital Mauritius, Elara India Opportunities Fund, Edelweiss Mutual Fund (MF) Axis MF and DSP MF, among others, have participated in the anchor book. In the primary market, Aptus Value Housing Finance shares were quoting at a premium of Rs 22. Aptus Value Housing Finance shares were trading at Rs 375, a premium of over 6 per cent, as against the IPO price. Upon listing Aptus Value Housing will join peers Aavas Financiers Limited.

Should you subscribe to Aptus Value Housing Finance

Geojit Financial Services
Rating: Subscribe

At the upper price band of Rs.353, Aptus Value Housing Finance India is available at  P/BV of  8.8x (FY21) which appears to be fully priced. Geojit Financial Services has assigned a subscribe rating for the issue on a long-term basis considering its strong return ratios, impressive growth and attractive margins. According to the CRISIL Report, AVHFIL had the highest RoA of 6.5% among the peers in FY21 and has an  average RoE of 11.1%, 11.4% and 9.3% in FY21, FY20 and FY19 respectively. 

Antique Stock Broking
Rating- Subscribe

While the progress in affordable housing in India has been rather slow, with total outstanding loans at mere INR880bn (3% of mainstream housing), Aptus has crafted its own success story through a combination of identifying the right customer profile, the right collateral and heavy usage of analytics, systems and process. However, valuations at 5.4x on post-money book and 45x on FY23e earnings do not leave much upside in the near term. Investors with long term outlook can look to subscribe.

Marwadi Shares and Finance
Rating: Subscribe

Considering the FY21 adjusted BVPS of Rs.50.03 on post issue basis, the company is going to list at a P/B of 7.06 with a market cap of Rs.1,74,940 mn, while its peer namely Aavas Financiers is trading at a P/B of 8.47. Analysts have assigned subscribe rating to this IPO as company has presence in large underpenetrated markets with strong growth potential and is available at reasonable valuation as compared to its peers.

Axis Capital
Rating: Not rated

The company primarily serve low and middle-income self-employed customers in rural and semi-urban markets. This customer segment offers them significant growth opportunities since they are primarily new to credit customers, without formal income proofs and are un-served or underserved by formal financial institutions. The company will continue to disburse loans only to retail customers for the purchase or construction of self-occupied homes as part of their risk mitigation strategy.

(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)

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