Aptus Value Housing to Raise RS 3,000 Crore via IPO

Overview of the company:

• The company is a retail focused housing finance lender that zeroes in on customers  from low and middle income brackets in rural and semi-urban areas.
• Aptus Value Housing Finance India limited, a Chennai-based company is looking to raise anywhere between Rs 2,600 crore to Rs 3,000 crore via its IPO.
• The housing finance company currently boasts of the largest branch network in India. Under the IPO, the company is targeting a fresh issuance of shares totalling Rs 500 crore and an Offer for Sale of shares of 6.5 crore shares by the promoter and other shareholders.
• The company intends to raise the funds so as to expand its capital base.
• As of the quarter ending December 2020, the company had 181 branches across India and close to Rs 37.91 billion under management.
• The company offers loans to self-employed individuals in the range of Rs 5-25 lakhs.
• States like Tamil Nadu and Puducherry make up for close to 54% of the loan book of the company while Andhra Pradesh makes up for the remaining 25%. States like Telangana and Karnataka account for 10% each.

Price band and marquee investors:

• The company is still to declare the price band. Apparently, the price band will be determined through a book-building process. The company said that it will use the funds raised to increase its capital base and to fund future growth prospects.
• Marquee investors like WestBridge Crossover fund, Malabar India Funds Limited, SCI investments VI, Madison India opportunities IV and Steadview Capital Mauritius Limited are all backing Aptus Value Housing Finance Limited’s IPO.
• WestBridge Crossover Fund is the investor promoter whereas Malabar India Funds Limited is an affiliate of Malabar Investments. SCI Investments VI is an affiliate of Sequoia Capital and Steadview Capital Mauritius Limited is an affiliate of Steadview Capital Management Limited.
• The above-mentioned four funds hold a total of 55% in Aptus Value Housing Finance Limited.

Founder and financial management:

• The company was founded by M Ananda who was formerly the CEO and the director of the financial services businesses in the Murugappa group.
• Under the Offer for Sale 2.5 million shares by Padma Anandan, 5 lakh shares by WestBridge Crossover Fund LLC, 19.76 million shares by Aravali Investments Holdings, 27.88 million shares by JIH II LLC, 9.99 million share by Ghiof Mauritius and 3.72 million shares by Madison India Opportunities IV will be offered.
• For FY20, it reported a net profit of Rs Rs 211.01 crore as against Rs 111.56 crore reported a year earlier.
• For FY20, it reported a revenue of Rs 523.72 crore as against Rs 337.11 crore reported in the previous fiscal.
• For the nine-months ending in December 2020, the total loan disbursed for the company stood at Rs 8,788.48 million as against Rs 12,709.80 million for FY20.
• Its net NPAs or non-performing assets stood at 0.57% in December 2020 compared to 0.54% in March 2020. Its gross NPAs were at 0.77% in December 2020 as against 0.7% in March 2020.
• ICICI Securities, Citigroup Global Markets, Edelweiss Financial Services and Kotak Mahindra Capital are the book running lead managers for this IPO.
• The company has reserved 50% of the issue for Qualified Institutional Buyers (QIBs), 15% for non-institutional buyers and 35% for retail investors.