India Shelter Finance saw its initial public offering (IPO) receive a healthy response from retail investors on the first day of bidding. The IPO opened for subscription today and will remain open until Friday, December 15.
Through the issue, the company aims to raise ₹800 crore via the issuance of fresh equity shares, whereas existing shareholders and promoters are divesting stake worth ₹400 crore. This results in a total IPO size of ₹1,200 crore.
The price band for the offer has been fixed at ₹469–493 per equity share, with a face value of ₹05 each.
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Retail investors have the opportunity to submit bids for up to 13 lots, with each lot containing 30 shares. At the upper end of the IPO price band, at ₹493, retail investors are required to make a minimum investment of ₹14,790 per lot.
India Shelter Finance Corporation, a housing finance company regulated by the National Housing Bank (“NHB”), specialises in providing loans and advances for housing activities.
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The company caters to the housing finance needs of customers, focusing primarily on self-employed individuals. Its target demographic includes first-time home loan applicants in the low and middle-income groups, with a geographical focus on Tier II and Tier III cities in India.
Subscription status on Day 01
The IPO was fully subscribed on the first day of its offering. The IPO received bids for 2,65,83,780 shares against the 1,79,10,449 shares available for subscription, resulting in a subscription rate of 1.48 times, as per BSE data.
Also Read: India Shelter Finance IPO: Check out 10 key risk factors before investing
Notably, the retail segment of the IPO showed strong demand, with a subscription rate of 1.90 times. Similarly, the non-institutional investors (NIIs) segment saw a subscription rate of 1.74 times, while the qualified institutional buyers (QIB) portion saw a less enthusiastic response, with a subscription rate of 0.57%.
Brokerage views on the IPO
“At the upper end of this price band, India Shelter Finance is valued at pre-money Sep-23 P/B of 3.3x and post-money Sep-23 P/B of 2.4x for H1FY24 annualised ROE of 16.4% vs peers (Sep-23 P/BV, ROE), such as Home First (4.6x, 15.6%), AAVAS (3.5x, 14.1%), and Aptus (4.6x, 17.1%).”
“Compared with peer valuations and the growth delivery, ISFCL’s IPO valuation appears favorable,” said domestic brokerage firm Emkay Global Financial Services.
Swastika Investmart said that India Shelter Finance is a growing affordable housing finance company with a retail-focused portfolio. It has an extensive and diversified distribution network and a strong risk management system. It is a technology-driven company with a scalable operating model. The financial performance of the company has also been stable.
Based on the company’s solid fundamentals, attractive valuation, and long-term growth potential, the brokerage recommends a ‘Subscribe’ rating for the IPO.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 13 Dec 2023, 06:24 PM IST