Aptus, founded by former Murugappa Group executive M Anandan, will dilute about a 15-20% stake, valuing the company at around Rs20,000 crore.
ICICI Securities, Citigroup, Edelweiss Securities and Kotak were hired as the book runners to the offering, which is scheduled in the second quarter of the next fiscal year, said people aware of the matter.
About 55% of Aptus is held by private equity investors – Westbridge Capital, Sequoia Capital, Steadview Capital and Malabar Investment Advisors.
The transaction could involve both primary and secondary infusions as some of the private equity investors would be taking a partial exit through the issue, said one of the people.
As of December 2020, Aptus has a loan book of Rs4,000 crore. The company offers loans in the range of Rs 5-25 lakh for self-employed people.
Aptus chairman Anandan and a spokesperson for Sequoia declined to comment, while mails sent to WestBridge and Malabar Investment Advisors did not elicit any responses till press time Sunday.
The company reported a total income of Rs523 crore for the year ended March 31, 2020, with a net profit of Rs193 crore.
In 2019, Aptus had raised Rs 880 crore ($122 million) in a round led by existing investor WestBridge Capital where Steadview Capital and Sequoia Capital came in as new investors. WestBridge had invested Rs 100 crore in Aptus in 2014 and another Rs270 crore along with Caspian in a follow-up round in 2016.
Tamil Nadu and Puducherry accounted for 54% of the company’s total portfolio, followed by Andhra Pradesh (25%) and Telangana and Karnataka (10% each).
Aptus, on a consolidated basis, has consistently reported healthy profitability indicators, according to ratings firm ICRA.
“The profitability is supported by low credit costs and improving operating efficiencies, while the interest margin moderated because of high on-balance sheet liquidity,” ICRA said. “Going forward, the ability to keep the credit costs under control, in view of the impact of the pandemic on borrower cash flows, and maintain an optimal cost structure as the business expands would be crucial. ICRA expects the RoMA (return on average managed assets) to stabilise at about 5%, over the medium term.”
India ranked ninth globally in terms of the number of IPOs in 2020, with 43 offers that collectively raised $4.1 billion, according to data compiled by EY.
“There is a strong momentum in the IPO markets and we are seeing an increased interest from companies across sectors looking to raise capital in the near term,” said Sandip Khetan, national leader, financial accounting advisory services, EY India. “Additionally, companies are keenly awaiting guidelines for direct listing in overseas markets. The market sentiment remains positive for what could be a stellar 2021.”
