Incorporated in 1998, India Shelter Finance Corporation is a retail focused affordable housing finance company. It caters to the self-employed customer, focusing on first-time home loan takers in the low and middle income group in Tier II and Tier III cities in India. Its product portfolio consists of home loans and loans against properties.
It has a network of 203 branches spread across 15 states with a significant presence in the states of Rajasthan, Maharashtra, Madhya Pradesh, Karnataka and Gujarat as of 30 September 2023. Its strategy is to penetrate regions with a substantial demand for affordable housing finance, and it is present in states that cover 94% of the affordable housing finance market in India as of 31 March 2023.
Its integrated customer relationship management and loan management system is set up on a cloud-based platform, and 91% of its collections were made through digital modes in FY23. It sources its debt financing requirements from public and private sector banks, refinancing from the NHB, external commercial borrowings and the issuance of nonconvertible debentures. As of 30 September 2023, it employed 2,997 employees and had a healthy (stable) credit rating from ICRA and CARE.
Between FY21 and FY23, it saw a CAGR rise of 25% in its AUM (Assets Under Management) and 21% in its profit. Moreover, the Indian Housing Finance market is expected to grow at a CAGR of 13%-15% between FY23 and FY26, which could benefit the company.
And now, India Shelter Finance Corporation Limited is coming out with its initial public offer (IPO). The IPO will be an offer for sale as well as a fresh issue. The money raised through the fresh issue will be used to meet future capital requirements and for general corporate purposes. Its shares will be listed on the NSE and the BSE.
Here are key details about the India Shelter Finance Corporation IPO:
Company Name — India Shelter Finance Corporation Limited
Company Type — Private
Company Established — 1998
IPO Open Date — 13th December 2023
IPO Close Date — 15th December 2023
IPO Allotment Status — 18th December 2023
Credit of Shares to Demat — 19th December 2023
IPO Listing Date — 20th December 2023
IPO Face Value — ₹5 per share
IPO Lot size — 30 shares
IPO Issue Size — Approx ₹1,200 crore
IPO Listed at — NSE, BSE
IPO Price — ₹469 – ₹493 per share
Strengths
- Operates in a growing industry as rising urbanisation, growing disposable income, favourable demographics and government measures are expected to lead to higher mortgage penetration going forward.
- Diversified phygital distribution network in Tier II and Tier III cities with over 13 years of experience as a housing finance company.
- The in-house orientation model ensured seamless operations as 97% of its disbursed loans originated in-house in FY23.
- Technology and analytics-driven company with an aggregate information technology spending of ₹7.4 crore in FY23.
- Robust risk management systems, as 68% of its customers maintained a credit score of 650 or higher as of 30 September 2023.
Risks and threats
- Requires substantial capital as its total outstanding borrowings stood at ₹2,973 crore in FY23.
- Concentrated in the states of Rajasthan, Maharashtra and Madhya Pradesh as they contributed to 63% of its total AUM in FY23.
- Exposed to the risk of non-payment or default by customers as well as the inability to recover the full value of collateral or amounts outstanding under defaulted loans.
- Operates in an extensively regulated industry. Subject to periodic inspections by the National Housing Bank and the Reserve Bank of India.
- Affected by volatility of interest rates for its lending and treasury operations as 75% of its borrowings are floating interest-bearing liabilities as of 30 September 2023.
- Faces competition from Aadhar Housing Finance Limited, Aavas Financiers Limited, Home First Finance Company India Limited and Aptus Value Housing Finance India Limited.
- Experienced negative cash flows from operating activities in the last three years.
You can now apply for the India Shelter Finance Corporation Limited IPO. Click here to apply .