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  5. India Shelter Finance IPO subscribed 1.48x times on day 1 Q

India Shelter Finance IPO subscribed 1.48x times on day 1 Q

India Shelter Finance IPO subscribed 1.48x times on day 1 Q
  • The response from qualified institutional buyers was muted at 0.57 times the shares on offer.
  • The non-institutional investors portion was subscribed 2.41 times while the retail investors portion was subscribed 1.9 times.
  • From FY21 to FY23, the company recorded a two-year compound annual growth rate (CAGR) of 40.8% in assets under management (AUM).
Affordable housing company India Shelter Finance Corporation’s IPO was subscribed to 1.48 times the shares on offer.

The response from qualified institutional buyers was muted at 0.57 times the shares on offer. The non-institutional investors portion was subscribed 2.41 times while the retail investors portion was subscribed 1.9 times.

The company has secured ₹360 crore from anchor investors, which include entities like Goldman Sachs Funds, ICICI Prudential Mutual Fund (MF), Kotak Mahindra MF, UTI MF, Nippon India MF, Quant MF, Edelweiss MF, Bandhan MF, Tata MF, ICICI Prudential Life Insurance Company Ltd, SBI Life Insurance Co Ltd, and Max Life Insurance Company.

Type of investor

No of times subscribed

Qualified Institutional Buyers

0.57

Non-institutional Investors

2.41

Retail

1.90

Total

1.48


Source: BSE

The inaugural public offering, priced between ₹469 and ₹493 per share, is available for subscription from December 13th to 15th. This ₹1,200 crore IPO consists of a fresh issue of equity shares valued at ₹800 crore and an Offer For Sale (OFS) of ₹400 crore by investor shareholders.

India Shelter Finance Corporation (ISFCL) operates as a retail-centric, affordable housing finance firm, boasting a wide-reaching network of 203 branches across 15 states in India as of September 2023.

The company caters specifically to self-employed individuals and borrowers from low- and middle-income brackets seeking home loans (HL) and loans against property (LAP). It caters to primarily the self-employed, low-to-middle income (under ₹50,000 per month) individuals in Tier II/III towns.

According to Emkay Global, ISFCL places significant emphasis on providing loans to women, recognizing their pivotal role in financial decisions, leading to improved household expense management and a disciplined credit approach.

As of September 30, 2023, 70.7% of its customers were first-time home loan applicants, and 97.9% of the loans had one or more women borrowers.

From FY21 to FY23, the company recorded a two-year compound annual growth rate (CAGR) of 40.8% in assets under management (AUM). As of September (H1 FY24), the company's asset under management (AUM) has surpassed the milestone of ₹5,000 crore, reaching ₹5,181 crore.

During the fiscal year ending in March 2023, it achieved a year-on-year total income growth of 32%, reaching ₹606 crore. In the same period, the profit increased by 21% to ₹155 crore.

Their business and operations necessitate significant capital, and any disruption in their financing sources could adversely impact their business, financial condition, and operational outcomes.

Also, failure to comply with the financial and other covenants outlined in their debt financing arrangements may have adverse implications for their business, financial condition, and operational results.

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