India Shelter Finance IPO: The initial public offering of affordable housing finance company India Shelter Finance is witnessing the second day of bidding on Thursday. Till 4:00 pm on Thursday, the Rs 1,200-crore IPO has been subscribed 3.97 times, receiving bids for 6,76,17,930 shares as against 1,70,38,540 shares on offer.
The category meant for non-institutional investors received 6.24 times subscription, while the quota for retail individual investors (RIIs) got subscribed 4.90 times. The portion for qualified institutional buyers (QIBs) was subscribed 0.64 times.
On the first day of bidding on Wednesday, the IPO saw about 1.9 times subscription. The India Shelter Finance IPO was opened for public subscription on Wednesday, December 13, and will conclude on Friday, December 15.
The India Shelter Finance IPO will be listed on both BSE and NSE on December 20, while the share allotment might be finalised on December 18.
India Shelter Finance IPO GMP Today
According to market observers, unlisted shares of India Shelter Finance are currently trading Rs 145 higher in the grey market as compared with its issue price. The Rs 145 grey market premium or GMP means the grey market is expecting a 29.41 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
India Shelter Finance IPO: Should You Subscribe?
Giving a ‘Subscribe for Long-Term Horizon’ rating to the IPO, SBI Securities in its note said, “The company is valued at P/BV of 2.4x/2.5x of its 1HFY24 financial data at the lower and upper price band respectively on post-issue capital. It is one of the fastest-growing housing finance companies in India, with an extensive distribution network and a well-established presence in Tier II and III cities.”
It added that the business model is analytical-driven and scalable, with strong underwriting, collection, credit control, and collateral evaluation processes. “We are optimistic about their niche presence in the affordable housing space and would recommend for medium to long-term play.”
Brokerage firm GEPL Capital has also given a ‘Subscribe’ rating to the issue. “Based on the valuation, issue appears to be fairly valued, The company exhibits robust AUM growth with high yields, emphasizing a granular, retail-oriented portfolio. The company benefits from pricing control, healthy margins, reduced turnaround time, and enhanced asset quality. Strong asset quality is evident with GNPA at 1.00 per cent, NNPA at 0.72 per cent, and 68.9 per cent of customers possessing a credit score of 650 or higher.
“Hence, we recommend a ‘Subscribe’ rating to the stock issue,” GEPL said.
“At the upper price band of Rs 493, the company is looking for post issue market cap of Rs 5,291.69 crore, which implies an earning multiple (P/B) of 1.92(x),” GEPL said.
Giving ‘Subscribe’ recommendation, Rajan Shinde, research analyst at Mehta Equities, also said, “India Shelter IPO offer gives investors an opportunity to invest in fastest-growing affordable housing finance sector, with a targeted focus on financing residential properties for first-time home loan takers. We think their impressive AUM growth of 40.8 per cent between FY2021 and FY2023 reflects their agility and market responsiveness and their significant presence in key states, comprising 47 per cent of the affordable housing finance market, reflects a robust regional foothold.”
“We are recommending investors to ‘Subscribe’ for the long term,” Shinde said.
India Shelter Finance IPO Details: Lot Size, Minimum Investment
The price band of the Rs 1,200-crore IPO has been fixed at Rs 469-493 a share. The IPO comprises a fresh issue of equity shares worth Rs 800 crore and an offer-for-sale (OFS) of Rs 400 crore by investor shareholders.
Investors can bid for a minimum of 30 equity shares and in multiples of 30 equity shares thereafter.
Those offering shares in the OFS include Catalyst Trusteeship Ltd, Madison India Opportunities IV, MIO Starrock, Nexus Ventures III Ltd, and Nexus Opportunity Fund II Ltd.
Proceeds of the fresh issue will be used to meet future capital requirements towards onward lending and for general corporate purposes. Half of the issue size has been reserved for qualified institutional buyers (QIBs), 35 per cent for retail investors, and the remaining 15 per cent for non-institutional investors.
India Shelter Finance, which is backed by Westbridge Capital and Nexus Venture Partners, is a retail-focused affordable housing finance company with an extensive distribution network and technology infrastructure. The company’s target segment is self-employed customers with a focus on first-time home loan takers in the low and middle-income groups in Tier II and Tier III cities in India.
ICICI Securities, Citigroup Global Markets India, Kotak Mahindra Capital Company, and Ambit are the book-running lead managers to manage the IPO.
(The headline and story have been updated with the latest GMP and subscription data till 4:00 pm)