India Shelter Finance IPO - Play On Affordable Housing Segment: IDBI Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..IDBI Capital's IPO Report.India Shelter Finance Corp. is set to launch its initial public offering today and the issue will close on Dec. 15. The minimum bid lot is 30 equity shares and in multiples thereafter.The retail focused affordable housing finance company aims to raise Rs 1200 crore. The IPO will be a combination of a fresh issue of 1.62 crore shares for Rs 800 crore and offer for sale will have 0.81 crore shares for Rs 400 crore..Key Investment RationaleOne of the fastest growing assets under management among housing finance companies in India, high yields, and granular, retail focused portfolio:Extensive and diversified phygital distribution network with significant presence in tier II and tier III cities.Underpenetrated housing segment.Diversified financing profile with a demonstrated track record of reducing financing costs..Competitive strengthIn-house origination model to ensure efficient and seamless operations across various key functions.Technology and analytics-driven company with scalable operating model.Robust underwriting, collection and risk management systems.Experienced management team supported by qualified and experienced personnel..Strategies: Further grow and diversify its distribution network to achieve deeper penetration in key states and drive sustainable growth.Leverage its technology stack to achieve scalability, improving efficiency and productivity of its existing branches.Enhance brand equity and foster sustainability..About the companyIndian Shelter Finance Corporation is retail focused affordable housing finance company with an extensive distribution network comprising 203 branches as of September 2023 and a scalable technology infrastructure across its business operations. It achieved assets under management growth of 40.8% compound annual growth rate between FY2021 and FY2023, second highest among the compared peers in India. Further, the company has robust underwriting process which involves specialized and independent teams dedicated to credit evaluation. It also boasts of a demonstrated track record of reducing its borrowing costs (average cost of borrowing ~8.3% in March 2023 versus 8.7% in March 2021). At upper price band, IPO is priced at price/book value of 3.2 times based on Sep-23 (versus 3.6 times-4.6 times for peers) with an return on asset of 4.7%. We recommend 'Subscribe' for long term..Key risks The business requires substantial amount of capital to operate. Any disruption in financing channels could harm the business prospects. The business faces risk from the inability to transmit the changes to the borrowers when the same has been received from the lenders. Since the business is heavily reliant on technology, it faces the risks arising from loss of data, system failures, cyber-attacks and reliance on third-party service providers.Non-compliance with financial and other covenants under debt financing arrangements could adversely affect the business, its financial condition, and results of operations.The business faces a credit risk pertaining to deterioration of its asset quality due to uncertainty regarding its customers’ ability to repay the loans..Click on the attachment to read the full IPO report:.India Shelter Finance IPO - Investment Rationale, Issue Details, Financials, Risks: Anand Rathi.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

India Shelter Finance IPO - Play On Affordable Housing Segment: IDBI Capital

India Shelter Finance Corp. is set to launch its Rs 1200 crore initial public offering today and the issue will closed on Dec. 15. The minimum bid lot is 30 equity shares and in multiples thereafter.

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India Shelter Finance IPO - Play On Affordable Housing Segment: IDBI Capital

India Shelter Finance Corp. is set to launch its Rs 1200 crore initial public offering today and the issue will closed on Dec. 15. The minimum bid lot is 30 equity shares and in multiples thereafter.

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