Fundamental

Aptus Value Housing Finance IPO Note


Aptus Value Housing Finance Ltd (Aptus), incorporated in 2009, is a South India based affordable housing finance company that targets first time home buyers in low and middle income groups, self-employed customers. The company is promoted by M. Anandan, Padma Anandan, and West Bridge Crossover Fund, LLC. Company serves self-employed and salaried customers, which accounted for 72% and 28% of gross loan assets as on FY21. Company does not offer any loans to builders or for commercial real estate. It has a strong branch network of 190 branches across 75 districts in 4 different states with key presence in markets such as Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka. Aptus serviced 58,069 active loan accounts as on FY21 with gross loan book of INR 4,068 cr.


Valuation and View: The company has performed well over the last 3 years and has shown a AUM growth of 35% CAGR with customer base growth of 37% CAGR over FY19-21. It has one of the highest return ratios amongst peers with RoA/RoE at 6.5%/14.5% as on FY21. The key advantages of the company are its continues focus on the niche play i.e targeting salaried and self- employed customers which sets it up for growth, its ability of better service delivery, funding availability with competitive cost of funds and high capital level. With the high demand in housing landscape in the wake of low interest rates, thrust on affordable housing, favorable demographics and support from the government, housing finance sector is expected to grow at 11-12% CAGR over FY21-25 as per CRISIL. While the fundamentals of the company are strong but the pricing of IPO is a tad expensive at 7x FY21 P/BV (post issue). We have Neutral view on the issue.

 

Tags: IPOFundamental


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