About the Company:
Aavas Financiers Ltd is a retail, affordable housing finance company, primarily serving low and middle income self employed customers in semi-urban and rural areas in India.
Company is registered with the NHB (National Housing Bank) as an HFC (Housing Finance Company) and commenced operations in Jaipur, Rajasthan in March 2012.
Company offers customers home loans for the purchase or construction of residential properties, and for the extension and repair of existing housing units.
As of March 31, 2018, a majority of the home loans that they disbursed were for single-unit properties, almost all of which were to be occupied by the borrowers themselves.
In addition to home loans, Company also offers mortgage loans including loans against property, which accounted for 22.44% of their Gross Loan Assets as of March 31, 2018.
Company conducts its operations through 165 branches spread across 92 districts in eight states of which, they have a significant presence in the four states of Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.
Since the commencement of Company’s operations in March 2012, they have served more than 57,000 customers.
Company’s Other Business Initiatives:
Distribution of Insurance Products.
In December 2017, Company has received a certificate of registration to act as corporate agent from the Insurance Regulatory and Development Authority of India.
Pursuant to this certificate and applicable guidelines, Company is permitted to enter into arrangements with insurers for the distribution of life, general and health insurance products. They currently distribute insurance products for property.
Company’s History:
Company is registered with the NHB (National Housing Bank) as an HFC (Housing Finance Company) and commenced their operations in Jaipur, Rajasthan in March 2012.
Company was initially promoted by Au Financiers (India) Limited, (now known as AU Small Finance Bank Limited (“AuSFB”)), which sold 90.10% of the outstanding equity interest of the Company in connection with its conversion to a small finance bank, to Lake District Holdings Limited (a subsidiary of Kedaara Capital I Limited) in June, 2016.
Subsequently the name of the Company was changed from ‘AU Housing Finance Limited’ to ‘Aavas Financiers Limited’ in March 2017.
Key Financial Metrics:
Competitors for the Company:
The housing finance industry in India is highly competitive. Aavas Financiers face competition from other HFCs, NBFCs as well as scheduled commercial banks.
They generally compete on the basis of the range of product offerings, interest rates, fees and customer service, as well as for skilled employees, with their competitors.
Company’s primary competitors include GRUH Finance Limited, Aadhar Housing Finance Limited, Dewan Housing Finance Corporation Limited, India Shelter Finance Corporation Limited and GIC Housing Finance Limited.
Management Team:
- Mr. Krishan Kant Rathi (Designation: Independent Director and Chairman)
- Mr. Sushil Kumar Agarwal (Designation: Whole-time Director and CEO)
- Mr. Sandeep Tandon (Designation: Independent Director)
Special Thanks: We would like to thank Board of Directors of Aavas Financiers Ltd for inviting Markets Guruji Team to the IPO Press Conference & Listing Ceremony.
Positives for the Company:
Strong Distribution Network with Deep Penetration Serving Underserved Customers in Rural and Semi-Urban Markets.
Company had commenced their operations in March 2012 with a focus on serving low and middle income self employed customers in the rural and semi-urban markets and are currently present in eight states in India.
Company’s branches are predominantly located in rural and semi-urban areas and as of March 31, 2018, of the 165 branches, 133 branches were located in towns with a population of less than one million people.
A large segment of India’s rural and semi-urban population is currently unserved and underserved by formal financial institutions.
Expansion of Branch Network:
While historically most of their operations were focused in Rajasthan, Maharashtra, Gujarat and Madhya Pradesh and have grown their operations in relatively newer markets such as Delhi, Haryana, Uttar Pradesh and Chhattisgarh.
Company intends to continue to expand in an on-ground contiguous manner, to drive greater and deeper penetration in the eight states in which they operate and set up an additional 70 branches during Fiscal 2019.
Company also intends to commence operations in the state of Uttarakhand during Fiscal 2019.
Financials of the Company:
| (in Crores) | FY 14 | FY 15 | FY 16 | FY 17 | FY 18 |
|---|---|---|---|---|---|
| Revenue | 54.32 | 103.75 | 190.89 | 305.49 | 457.27 |
| Net Profit | 6.3 | 19.0 | 32.78 | 57.13 | 92.8 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Aavas Financiers Limited | 10 | 15.20 | 54.01 | 8.46% | 157.03 |
| HDFC Limited | 2 | 98.9 | 18.6 | 18.8% | 516.4 |
| Gruh Finance Limited | 2 | 9.9 | 35.4 | 26.3% | 37.8 |
| Repco Home Finance Ltd | 10 | 34.4 | 34.4 | 16.0% | 215.4 |
| Can Fin Homes Limited | 2 | 22.7 | 16.2 | 22.4% | 101.1 |
| PNB Housing Finance Ltd | 10 | 49.2 | 22.3 | 13.2% | 378.5 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 25th September 2018 |
| Issue Closes on:. | 27th September 2018 |
| Issue Price | Rs.818 – 821 |
| Face Value | Rs.10 |
| Minimum Lot | 18 Shares |
| Minimum Investment | Rs.14,778 |
| Issue Constitutes | 27.92% |
| Issue Size | Rs.1734 cr |
| Market Cap | Rs. 6,208 cr |
| Listing at | NSE & BSE |
| Equity Shares Offered (OFS) | 1,62,49,359 |
| Equity Shares Offered (Fresh) | 48,72,107 |
| Equity Shares Offered (OFS + Fresh) | 2,11,21,466 |
| Equity Shares Prior to the Issue | 7,07,50,891 |
| Equity Shares after the Issue | 7,56,22,998 |
Important Dates:
| Finalization of Basis of Allotment | on or before 3rd October 2018 |
| Initiation of Refunds | on or before 4th October 2018 |
| Credit of Equity Shares: | on or before 5th October 2018 |
| Listing Date: | on or before 8th October 2018 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 06:00 PM) | Shares Offered | Day-1 | Day-2 | Day-3 |
|---|---|---|---|---|
| QIB | 42,24,293 | 0.12 | 0.81 | 2.77 |
| NII | 31,68,220 | 0.00 | 0.12 | 0.26 |
| Retail | 73,92,514 | 0.02 | 0.07 | 0.25 |
| Employee | ———– | — | —– | —- |
| TOTAL | 1,47,85,027 | 0.04 | 0.29 | 0.97 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 15.20 | 54.01 | 8.46% | 157.03 |
| Check IPO Allotment Status: |
|---|
Link InTime Website (Click on the below Link)https://linkintime.co.in/PublicIssue/ |
Reviews of Current & Upcoming IPOs:
| Company Contact Info: |
|---|
| Aavas Financiers Ltd 201-202, 2nd Floor, South End Square, Mansarover Industrial Area, Jaipur 302020 Rajasthan, India Telephone: +91 141 661 8800 Facsimile: +91 141 661 8861 E mail: ipo@aavas.in Website: www.aavas.in |
| IPO Registrar Info: |
|---|
| Link Intime India Private Limited C-101, 1st Floor, 247 Park L.B.S. Marg, Vikhroli (West) Mumbai 400 083 Maharashtra, India Tel: +91 22 4918 6200 Fax: +91 22 4918 6195 E-mail: aavas.ipo@linkintime.co.in Website: www.linkintime.co.in |
