The issue, which will close today, received bids for 2,47,95,834 shares compared with the total issue size of 5,51,28,500 shares.
Aptus targets first-time homebuyers in low and middle-income groups, self-employed customers. It does not offer any loans to builders or for commercial real estate. The HFC has 190 branches across 75 districts in four different states, with a presence in Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka. Aptus serviced 58,069 active loan accounts as of FY21 with a gross loan book of Rs 4,068 crore.
The HFC had on Monday raised Rs 834 crore from 21 anchor investors, allocating 2,36,26,500 shares at Rs 353 per share.
The IPO is being sold in Rs 346-353 price band, which values the HFC at 8.8 times FY21 book value. Analysts said the asking valuations are stretched but the issue can be a good opportunity for long-term investors given Aptus’ presence in underpenetrated markets, its robust risk management and industry-leading profitability.
“Given strong capital base, we believe Aptus is on firm footing to capitalise on the huge opportunities in housing/mortgage loan space. We believe the sharp rise in gross NPA to 2 per cent in July from 0.7 per cent in March led by second Covid-19 wave is a near-term concern, which can ease with the recovery in economic activities,” said Reliance Seccurities.
Geojit Financial Services said Aptus is available at P/BV of 8.8 times on FY21 basis, which appears to be fully priced. “We assign a ‘subscribe’ rating to the issue on a long-term basis, considering the HFC’s strong return ratios, impressive growth and attractive margins,” it said.
“While the progress in
housing in India has been rather slow, with total outstanding loans at mere Rs 88,000 crore (3 per cent 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 5.4 times on post-money book and 45 times on FY23 earnings do not leave much upside in the near term,” said Antique Stock Broking.
The brokerage has a ‘subscribe for long term’ rating to the issue.
Choice Broking said the issue is aggressively priced. Its peer Home First Finance trades at a trailing P/BV of 3.6 times. While
trades at P/BV of 8.1 times, its asset under management (AUM) is more than double of Aptus’, it said,.
The company’s high dependence on the Tamil Nadu market, limited track record of Aptus’ assets given 65 per cent of the company’s book is built over the past three years are seen among key risks.
Stock Broking said that the company has performed over the last three years, with AUM growing 35 per cent annually and the customer base rising 37 per cent during the same period. Aptus has one of the highest return ratios amongst peers with RoA of 6.5 per cent and RoE of 14.5 per cent as of FY21, it said.
“Its continued focus on the niche play, i.e, targeting salaried and self-employed customers sets it up for growth, its ability of better service delivery, funding availability with competitive cost of funds and high capital level. While the fundamentals of the company are strong, the pricing of IPO is a tad expensive at 7 times FY21 P/BV (post issue),” it said, while suggesting a neutral stance on the issue.
