India Shelter Finance IPO: Strong Retail Demand Leads to Full Subscription on Day 1
On the opening day of India Shelter Finance's initial public offering (IPO), robust investor interest was evident, resulting in full subscription. According to BSE data, the IPO, which offers 1,79,10,449 shares, received bids for 2,65,83,780 shares, reaching a subscription rate of 1.48 times the available shares.
The retail segment, in particular, witnessed significant demand, achieving a subscription rate of 1.90 times. The IPO, open for subscription until December 15, aims to raise ₹800 crore through the issuance of fresh equity shares, with existing shareholders and promoters divesting a stake worth ₹400 crore. Consequently, the total IPO size stands at ₹1,200 crore.
The price band for the offer is set at ₹469–493 per equity share, each with a face value of ₹05. 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, retail investors are required to make a minimum investment of ₹14,790 per lot.
India Shelter Finance Corporation, regulated by the National Housing Bank (NHB), specializes in providing housing loans and advances. The company primarily caters to the housing finance needs of self-employed individuals, targeting first-time home loan applicants in the low and middle-income groups, with a focus on Tier II and Tier III cities in India.
The subscription status on Day 1 revealed a strong response from retail investors, with a subscription rate of 1.90 times. Non-institutional investors (NIIs) also showed enthusiasm with a subscription rate of 1.74 times, while qualified institutional buyers (QIB) displayed a less enthusiastic response, subscribing at a rate of 0.57%.
Brokerage firms view the IPO favorably, with Emkay Global Financial Services stating, "Compared with peer valuations and the growth delivery, ISFCL’s IPO valuation appears favorable." Swastika Investmart recommended a 'Subscribe' rating based on India Shelter Finance's strong fundamentals, attractive valuation, and long-term growth potential. The company is recognized as a growing affordable housing finance entity with a retail-focused portfolio, a diversified distribution network, a robust risk management system, and a stable financial performance.
Emkay Global Financial Services provided insights into India Shelter Finance's valuation, stating, "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 annualized ROE of 16.4%, as compared to peers like Home First (4.6x, 15.6%), AAVAS (3.5x, 14.1%), and Aptus (4.6x, 17.1%)."
The domestic brokerage firm highlighted that, considering peer valuations and growth delivery, the IPO valuation for India Shelter Finance appears favorable. Swastika Investmart also emphasized the company's positive attributes, characterizing it as a technology-driven entity with a scalable operating model.
Given India Shelter Finance's extensive and diversified distribution network, robust risk management system, and stable financial performance, Swastika Investmart recommended a 'Subscribe' rating for the IPO.
In conclusion, India Shelter Finance's IPO garnered strong interest on its opening day, driven by robust retail demand. With favorable reviews from brokerage firms citing the company's solid fundamentals, attractive valuation, and growth potential, the IPO is poised to make a significant impact in the financial market. Investors are closely watching the developments as the subscription period continues until December 15.
The remaining part of the paraphrase involves summarizing the information about India Shelter Finance's IPO and the brokerage firms' recommendations.
On the first day of the IPO, it became fully subscribed, receiving bids for 2,65,83,780 shares against the available 1,79,10,449 shares, indicating a subscription rate of 1.48 times. Notably, the retail segment demonstrated strong demand with a subscription rate of 1.90 times, while non-institutional investors (NIIs) subscribed at a rate of 1.74 times. Qualified institutional buyers (QIBs) displayed a less enthusiastic response with a subscription rate of 0.57%.
Emkay Global Financial Services highlighted the favorable valuation of India Shelter Finance at the upper end of the price band compared to peers. Swastika Investmart underscored the company's status as a growing affordable housing finance company with a retail-focused portfolio, recommending a 'Subscribe' rating based on its technology-driven approach, scalable operating model, and stable financial performance.
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