Aptus Value Housing Finance, one of the largest housing finance companies in terms of asset under management having the largest branch network in South India has filed it's papers with the regulator to raise approximately Rs.2,600 -3,000 cr as per market sources.
The fund raise comprises of a fresh issue of equity shares aggregating to 500 cr and an Offer for Sale of upto 64,590,695 equity shares by Promoter and Other Selling Shareholders.
Since the inception of the company in 2010 till date, the company has pristine asset quality with very low NPA and as of Dec 31, 2020 the companies AUM stood at Rs 3,790.93 cr of which 72.50% were loans to self-employed customers while the balance 27.50% accounted for salaried individuals.
As on Dec 31, 2020, the company had 1,844 personnel and a network of 181 branches catering to 56,430 active loan accounts across 75 districts in Tamil Nadu (including the Union Territory of Puducherry), Andhra Pradesh, Karnataka and Telangana and has a strong capital sponsorship by marquee investors i.e Westbridge, Malabar Investments, Sequoia Capital, Steadview Capital and Madison India.
AVHFIL, whose 60% customers are located in rural/semi urban regions offers home loans for purchase and self-construction of residential property, home improvement, extension loans, loan against property and business loans, primarily to first time home buyers belonging to the low and middle income groups The ticket sizes of its loans ranges between Rs 5-15L with tenures ranging between 8.5 to 12.5 years.
The asset quality focused financier in comparison to its peers, in FY20, not only had the highest ROA of 6.3% due to its optimal product mix and cost control measures but also had one of the lowest cost to income ratio at 26.4% as compared with peers in the Industry.
After successfully growing its presence outside its home state, Tamil Nadu to other major markets in southern India, it is now intending to expand its branch network in large housing markets in the states of Maharashtra, Odisha and Chhattisgarh.
The company has stayed resilient and has seen consistent performance through the past and ongoing macro-economic challenges. As of Dec 31, 2020 it's Net NPA stood at 0.57%, Capital Adequacy at 75.03% and Collection Efficiency at 99.20%.
The net proceeds from the issue will be utilized towards augmenting the company's capital base and to meet future growth requirements.
Investment Bankers appointed for the Issue are ICICI Securities Ltd, Citigroup Global Markets India Pvt Ltd, Edelweiss Financial Services Ltd and Kotak Mahindra Capital Company Limited.
Indian Housing Finance Market, particularly the affordable housing clocked a higher growth of 16%-18% (13% CAGR of normal housing finance) between FY18-20 on account of rise in disposable income, healthy demand from smaller city markets, attractive interest rates on governments impetus on housing. As an asset class it has the lowest annual credit losses.