The IPO may open on August 10 and close on August 12. As per sources, the IPO size could range anywhere in the Rs 2,600-3,000 crore range. The issue would comprise of a fresh issue of equity shares aggregating to Rs 500 crore and an offer for sale (OFS) of up to 64,590,695 shares by the promoter and other existing shareholders.
The housing finance company (HFC) had filed IPO draft papers with Sebi on May 14 and had received its nod in the last week of July.
Abhay Doshi, Founder, Unlisted Area, said the stock is trading in the unlisted market, but volumes are thin so far. “The unlisted stock was quoting at Rs 400 level a few days ago in the unlisted market. Now it has moved up to Rs 430. The traction is slow so far as the IPO is from the housing finance segment that is seeing some challenges due to Covid-led disruptions” he said.
Recent data by data analytic firm PropEquity suggests housing sales across seven major cities fell 58 per cent during April-June over the previous quarter due to the second wave of the Covid-19 pandemic.
The HFC’s asset under management (AUM) stood at Rs 3,790.93 crore as of December 31. Out of this, 72.50 per cent were loaned to self-employed customers and salaried individuals accounted for the rest.
As of Dec 31, 2020, the company had 1,844 personnel and a network of 181 branches catering to 56,430 active loan accounts across 75 districts in Tamil Nadu, Andhra Pradesh, Karnataka and Telangana. The company is backed by investors Westbridge, Malabar Investments, Sequoia Capital, Steadview Capital and Madison India.
The company’s 60 per cent of customers are located in rural and semi-urban regions. It offers home loans for purchase and self-construction of residential property, home improvement, extension loans, loan against property and business loans, primarily to first time homebuyers belonging to the low and middle-income groups. The ticket sizes of its loans range between Rs 5-15 lakh with tenures ranging between 8.5 to 12.5 years.
Net NPAs as of December 31 stood at 0.57 per cent, capital adequacy at 75.03 per cent, and collection efficiency at 99.20 per cent. Investors may wish to get more clarity on the latest figures to assess the impact of the second wave of Covid on the company’s financials.
Meanwhile, the net proceeds from the issue will be utilized towards augmenting the company’s capital base and meeting future growth requirements.
Investment bankers appointed for the issue are ICICI Securities, Citigroup Global Markets India,
and Kotak Mahindra Capital Company.