M Anandan, Padma Anandan, and WestBridge Crossover Fund, LLC are promoters of the company, holding 60.84 percent stake in the company, and promoter group held another 14.03 percent stake.
M Anandan is the Chairman and Managing Director of the company. He has over 40 years of experience in the financial services sector. (Representative image)
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Retail focused housing finance company, Aptus Value Housing Finance India is going to open its maiden public offer for subscription soon. This would be 38th IPO to be launched in the calendar year 2021.
Here are 10 key things to know before subscribing to it:
1) IPO Dates
The bidding for initial public offering will start on August 10 and will continue till August 12.
2) Price Band
The price band for the offer has been fixed at Rs 346-Rs 353 per equity share.
3) Public Issue Details
The offer consists of fresh issue of Rs 500 crore, and an offer for sale of 6,45,90,695 equity shares by existing shareholders Padma Anandan, JIH II, LLC, Aravali Investment Holdings, Madison India Opportunities IV, GHIOF Mauritius, KM Mohandass HUF, Saurabh Vijay Bhat and R Umasuthan.
Selling Shareholders
4) Objectives of Issue
Net proceeds from the offer will be utilised towards augmenting the company’s tier 1 capital requirements.
5) Lot Size and Investors’ Reserved Portion
Investors can bid for minimum of 42 equity shares and in multiples of 42 equity shares thereafter. As a result, the minimum investment by retail investors would be Rs 14,826 and the maximum would be Rs 1,92,738 for 13 lots. Retail investors are allowed to invest up to Rs 2 lakh in the IPO.
Half of the offer size is reserved for qualified institutional buyers (QIBs), 15 percent for non-institutional bidders, and the remaining 35 percent of the offer for retail investors.
6) Company Profile
Aptus Value Housing Finance is an entirely retail focussed housing finance company, primarily serving low and middle income self-employed customers in the rural and semi-urban markets of India. It is one of the largest housing finance companies in south India in terms of assets under management (AUM), as of March 2021.
Its AUM increased at a CAGR of 34.54 percent during FY19-FY21 to Rs 4,067.76 crore in March 2021. Since the inception of the company, it has not restructured any loans or written-off any loans receivable and as of March 2021, its gross non-performing assets (NPAs) as a percentage of gross loan assets was 0.68 percent.
It targets first time home buyers where the collateral is a self-occupied residential property. Loans to self-employed customers accounted for Rs 2,930.88 crore, or 72.05 percent of AUM, while loans to salaried customer accounted for Rs 1,136.88 crore, or 27.95 percent of AUM as of March 2021.
The company does not provide any loans to builders or for commercial real estate. It does not provide any loans with a ticket size above Rs 25 lakh and the average ticket size of home loans, loans against property and business loans on the basis of disbursement amounts was Rs 7.2 lakh, Rs 7.1 lakh and Rs 6.2 lakh, as of March 2021, respectively. Its home loans, loans against property and business loans had an average loan-to-value of 38.89 percent, 38.27 percent and 39.21 percent, respectively, at the time of sanctioning of the loans.
As of March 2021, it had a network of 190 branches covering 75 districts in Tamil Nadu, Andhra Pradesh, Karnataka and Telangana states, and the union territory of Puducherry. It had the largest branch network in south India among the peer set.
7) Competitive Strengths and Strategies
a) It has presence in large, underpenetrated markets with strong growth potential.
b) It has robust risk management architecture from origination to collections leading to superior asset quality.
c) The company conducts all aspects of lending operations in-house including sourcing, underwriting, valuation and legal assessment of collateral and collections, which enables it to maintain direct contact with customers, reduce turn-around-times and the risk of fraud
d) It has built domain expertise over the time resulting in a business model that is difficult to replicate by others in geographies.
e) It has an experienced and stable management team with marquee shareholders.
f) It has established track record of financial performance with industry leading profitability.
g) The company focusses on the social impact of its business and seeks to improve the standard of living of customers.
Strategies
a) The company continues to focus on low and middle income self-employed customers in rural and semi-urban markets.
b) It intends to increase penetration in existing markets and expand branch network in large housing markets.
c) It intends to grow business while focussing on maintaining asset quality. It has maintained asset quality across economic cycles, including events such as demonetisation, the liquidity crisis that was triggered by defaults by large financial services companies and the COVID-19 pandemic.
d) The company seeks to reduce average cost of long-term borrowings through improved credit ratings and by diversifying borrowing profile.
8) Financials
Aptus Value reported consistent growth in financials in last three fiscals. Profit in the year ended March 2021 stood at Rs 266.94 crore on revenue of Rs 636.6 crore, against profit of Rs 211 crore on revenue of Rs 500.3 crore in FY20, and profit of Rs 111.48 crore on revenue of Rs 310.88 crore in FY19.
Its focus on serving self-employed customers has resulted in high yields for its loan portfolio. As of March 2021, its average yield on disbursements was 16.88 percent against 17.18 percent in FY20 and 17.23 percent in FY19. It had the lowest cost to income ratio among the peer set during the financial year 2021, with operating expenses to net income ratio at 21.80 percent and credit costs to average total assets at 0.14 percent.
Its stronger yields and cost control measures have enabled it to achieve a superior return on assets of 6.46 percent in FY21. It had the highest return on assets of 5.7 percent among the peer set during the financial year 2021.
9) Promoters and Management
M Anandan, Padma Anandan, and WestBridge Crossover Fund, LLC are promoters of the company, holding 60.84 percent stake in the company, and promoter group held another 14.03 percent stake.
Investors included Aravali Investment Holdings having a 4.11 percent stake in the company, JIH II LLC with 8.69 percent shareholding, GHIOF Mauritius 2.08 percent, and Madison India Opportunities IV owned a 3.65 percent stake.
Among others, Malabar India Fund & Malabar Select Fund have a 7.89 percent stake in Aptus, Steadview Capital Mauritius 3.35 percent, and SCI Investments VI 3.32 percent shareholding.
Management
M Anandan is the Chairman and Managing Director of the company. He has over 40 years of experience in the financial services sector and has previously served as the managing director of Cholamandalam Investment and Finance Company, part of the Murugappa Group and was also managing director of Cholamandalam MS General Insurance Company. He has served as the Chairman and Managing Director on the Board of the company from December 11, 2009.
Kandheri Munuswamy Mohandass, Sankaran Krishnamurthy, Krishnamurthy Vijayan, VG Kannan, and Mona Kachhwaha are Non-Executive Independent Directors on the board. Shailesh Jayantilal Mehta and Suman Bollina are Non-Executive Directors, while Kanarath Payattiyath Balaraj and Sumir Chadha are Non-Executive Nominee Directors.
Balaji P is the Chief Financial Officer of the company. He has various years of experience in the textiles, telecom and finance sectors. He was previously associated with the Bombay Dyeing and Manufacturing Company, Hutchison Max Telecom and Cholamandalam MS General Insurance Company. He joined the company as the CFO on June 21, 2010.
10) Allotment, refunds and listing dates
After closing the issue on August 12, the company will finalise the IPO share allotment on August 18 and the funds will be refunded to ineligible investors on August 20.
Equity shares will be credited to demat accounts of eligible investors on August 23 and the trading in shares will commence with effect from August 24.
Equity shares will make a debut on the BSE and NSE. ICICI Securities, Citigroup Global Markets India, Edelweiss Financial Services and Kotak Mahindra Capital Company are the book running lead managers to the offer.
