Please refer to important disclosures at the end of this report
1
Aptus Value Housing Finance India Ltd is an entirely retail-focused housing finance
company primarily serving low and middle-income self-employed customers in the
rural and semi-urban markets of India. Company had the highest RoA of 5.7% among
the Peer Set during the financial year 2021. It is the largest housing finance
companies in south India in terms of AUM, as of March 31, 2021. Its AUM has
increased from March 31, 2019, to Rs.4067.76Cr as of March 31, 2021, at a CAGR
of 34.54%. Additionally, Company has not restructured nor written off any loan since
inception as on Mar’21. Its total branch tally was 192 as on July 10, 2021.
Positives: (a) Presence in large, underpenetrated markets with strong growth potential.
(b) Robust risk management architecture from origination to collections leading to
superior asset quality (c) In-house operations leading to desired business outcomes
(d) Domain expertise resulting in a business model difficult to replicate by others in
our geographies (e) Experienced and stable management team with marquee
shareholders (f) Established track record of financial performance with industry
leading profitability.
Investment concerns: (a) Pandemic like Covid-19 could affect company’s business,
operations and financial conditions. (b) Any disruption in sources of capital could
have an adverse effect on the business, results of operations and financial condition
(c) Inability to meet our obligations, including financial and other covenants under
debt financing arrangement. (d) NHB’s consent to undertake the Offer is subject to
certain conditions.
Outlook & Valuation: Aptus has posted strong growth in both NII and net profits of
46.2% and 54.7% between FY19-FY21. Despite the Covid-19 crisis the company’s
asset quality has remained largely stable with GNPA and NNPA largely stable at 0.6%
and 0.5% respectively at the end of FY2021. At the higher end of the price band the
stock would be trading at P/BV of 8.5x FY21 BVPS of Rs. 41.7 which is in line with
Aavas Financers which is a comparable company. Given strong growth prospects,
and industry leading return ratios we recommend a SUBSCRIBE rating on the issue.
Key Financials
Y/E March (` cr)
FY19
FY20
FY21
NII
195
301
417
% chg
-
54%
39%
Net profit
111
211
267
% chg
0%
89%
27%
NIM (%)
10.3%
9.9%
10.1%
EPS (`)
2.8
4.5
5.6
P/E (x)
124.7
79.1
62.8
P/ABV (x)
20.1
9.9
8.6
RoA (%)
4.8%
5.6%
5.9%
RoE (%)
16.0%
12.3%
13.5%
Source: Company, Angel Research.
Note: Valuation ratios at upper price band.
SUBSCRIBE
Issue Open: Aug 10, 2021
Issue Close: Aug 12, 2021
Offer for Sale: `2,280 cr
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Promoters 72.2%
Others 27.8%
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: `99.1cr
Issue size (amount): `2,735 - `2,780 cr
Price Band: `346-353
Lot Size: 42 shares and in multiple thereafter
Post-issue mkt. cap: * `17,147 cr - ** `17,494 cr
Promoters holding Pre-Issue: 74.8%
Promoters holding Post-Issue: 72.2%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Fresh issue: `500 cr
Issue Details
Face Value: `2
Present Eq. Paid up Capital: `96.3 cr
Aptus Housing Finance Ltd
Aptus Housing Finance Limited |IPO Note
August 09, 2021
Aptus Housing Finance Limited | IPO Note
Aug 09, 2021
2
Company background
The company was incorporated as ‘Aptus Value Housing Finance India Limited’ at
Chennai on December 11, 2009. The Promoters of the company are M. Anandan,
Padma Anandan, and WestBridge Crossover Fund, LLC. It is entirely retail focussed
housing finance company primarily serving low- and middle-income self-employed
customers in the rural and semi-urban markets of India. They are one of the largest
housing finance companies in south India in terms of AUM, as of March 31, 2021.
The company has not restructured any loans or written-off any loans receivable as
on Mar,31 2021.
Issue details
The issue comprises of OFS of upto `2,280 crore and Fresh issue of `500 Cr.
Pre and post IPO shareholding pattern
No of shares
(Pre-issue)
%
(Post-issue)
%
Promoter & Promoter Gp.
360,436,376
74.9%
357,957,864
72.2%
Public
120,979,914
25.1%
137,622,731
27.8%
Total
481,416,290
100%
495,580,596
100.0%
Source: Company, Angel Research & RHP.
Objectives of the Offer
To augment company's capital base to meet future capital requirements.
To meet issue related expenditures.
To achieve share listing benefits on the stock exchanges.
Key Management Personnel
M Anandan is the Chairman and Managing Director of the company. He has over
40 years of experience in the financial services sector and has previously served as
the managing director of Cholamandalam Investment and Finance Co Ltd, part of
the Murugappa Group and was also managing director of Cholamandalam MS
General Insurance Co Ltd. He has served as the Chairman and Managing Director
on the Board of the company from December 11, 2009.
Kandheri Munuswamy Mohandass is the Non-Executive Independent Director of
the company. He has over three decades of experience in the financial services
sector. He is also on the board of the Subsidiary, Aptus Finance India Pvt Ltd.
Sankaran Krishnamurthy is the Non-Executive Independent Director of the
company. He was the former deputy managing director of State Bank of India,
where he served for more than 38 years. He was also the managing director
and chief executive officer of SBI Life Insurance Co Ltd. He is also on the board
of the Subsidiary, Aptus Finance India Pvt Ltd.
VG Kannan is the Non-Executive Independent Director of the company. He has
previously served as the deputy managing director of State Bank of India. He
has various years of experience in the banking industry. He is also on the boards
of AU Small Finance Bank Ltd, Ageas Federal Life Insurance Co Ltd and OCM
India Opportunities Arc Management Pvt Ltd. manufacturing, and academics.
Aptus Housing Finance Limited | IPO Note
Aug 09, 2021
3
Exhibit 1: Consolidated Income Statement
Y/E March (` Cr)
FY19
FY20
FY21
Net Interest Income
195
301
417
- YoY Growth (%)
-
54.5%
38.8%
Other Income
26
38
31
- YoY Growth (%)
-
46.8%
-18.5%
Operating Income
221
339
449
- YoY Growth (%)
-
53.5%
32.3%
Operating Expenses
67
88
98
- YoY Growth (%)
-
32.0%
10.6%
Pre - Provision Profit
154
251
351
- YoY Growth (%)
-
62.9%
40.0%
Prov. & Cont.
1
3
6
- YoY Growth (%)
-
192.6%
69.5%
Profit Before Tax
153
247
345
- YoY Growth (%)
-
61.9%
39.5%
Prov. for Taxation
41
36
78
- as a % of PBT
-
-12.0%
115.4%
PAT
111
211
267
- YoY Growth (%)
89.3%
26.5%
Source: Company, Angel Research
Exhibit 2: Consolidated Balance Sheet
Y/E March (` Cr)
FY19
FY20
FY21
Equity
79
95
95
Reserve & Surplus
620
1,615
1,885
Networth
698
1,709
1,979
Borrowings
1,601
2,016
2,510
- Growth (%)
-
26%
25%
Other Liab. & Prov.
29
22
31
Total Liabilities
2,328
3,747
4,520
Cash Balances
107
484
423
Bank Balances
4
119
15
Investments
-
-
53
Advances
2,200
3,117
3,990
- Growth (%)
42%
28%
Fixed Assets
10
10
10
Other Assets
6
17
30
Total Assets
2,328
3,747
4,520
- Growth (%)
61%
21%
Source: Company, Angel Research
Aptus Housing Finance Limited | IPO Note
Aug 09, 2021
4
Key Ratios
Y/E March
FY19
FY20
FY21
Profitability ratios (%)
NIMs
10.3%
9.9%
10.1%
Cost to Income Ratio
30.3%
26.1%
21.8%
RoA
3.0%
4.7%
5.9%
RoE
16.0%
12.3%
13.5%
B/S ratios (%)
CASA Ratio
-
-
-
Credit/Borrowings Ratio
137.5%
154.6%
159.0%
CAR
43.6%
82.5%
73.6%
Tier I
43.2%
82.3%
73.8%
Asset Quality (%)
Gross NPAs
0.9%
0.7%
0.6%
Net NPAs
0.7%
0.5%
0.5%
Loan Loss Prov. /Avg. Assets
0.1%
0.1%
0.1%
Provision Coverage
25%
24%
22%
Per Share Data (`)
EPS
2.8
4.5
5.6
BVPS
17.7
36.2
41.7
ABVPS
17.7
36.1
41.7
DPS
-
-
-
Valuation Ratios
PER (x)
124.7
79.1
62.8
P/ABVPS (x)
19.9
9.8
8.5
Source: Company, Angel Research
Aptus Housing Finance Limited | IPO Note
Aug 09, 2021
5
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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