India Shelter Finance IPO fully subscribed on Day 1; retail & NII books sail through

The Rs 1,200 crore-initial public offering (IPO) of India Shelter Finance Corporation saw a strong response from the investors during the first day of the bidding process, across all major categories of investors. The issue had kicked-off for bidding on Wednesday, December 15.

The Gurugram-based India Shelter Finance Corporation is selling its shares in the price band of Rs 469-473 apiece with a lot size of 30 shares and its multiples thereafter. The three-day bidding for the IPO will close for bidding on Friday, December 15. The block consists of fresh share sale of Rs 800 crore, and offer-for-sale of up to 8,113,590 equity shares.

According to the data, the investors made bids for 1,82,72,550 equity shares, or 1.02 times, compared to the 1,79,10,449 equity shares offered for the subscription by 3.25 pm on Wednesday, December 15. The bidding for the issue will continue for three days.

Also read: India Shelter Finance Corporation IPO opens today: Should you subscribe to the issue?

The allocation for retail investors was subscribed 1.50 times, while the portion reserved for non-institutional investors saw a subscription of 1.01 times. However, the quota set aside for qualified institutional bidders (QIBs) attracted bids for 24 per cent as of the same time.

Established in 1998, India Shelter Finance Corporation specializes in housing finance, providing loans for house construction, extension, renovation, and the acquisition of new homes or plots. The company also extends loans against property (LAP) ranging from Rs 5 lakh to Rs 50 lakhs, with a repayment tenure of up to 20 years.

The company plans to expand its branch staff, extend the branch network within existing geographical areas, and explore opportunities in adjacent markets for diversification. Their credit and risk management policies which are backed by technology and data analytics have helped them to maintain asset quality, said StoxBox.

"Amongst its peer set, ISFC had the second-highest annualized RoA of 4.7 per cent for the six months ended September 30, 2023. The company has posted steady growth in its top and bottom lines. As the lender will utilize the net proceeds to meet future capital requirements towards lending, we are positive about the IPO," it added with a 'subscribe' rating.

India Shelter Finance Corporation raised Rs 360 crore from anchor investors by allocating 73,02,229 equity shares at a price of 493 per share. The IPO allocation includes 50 per cent reservation for qualified institutional bidders (QIBs), 15 per cent for non-institutional investors (NIIs), and remaining 35 per cent for retail investors.

India Shelter Finance Corporation is a growing affordable housing finance company with a retail-focused portfolio. It has an extensive and diversified distribution network and a strong risk management system. It is a technology-driven company with a scalable operating model. The financial performance of the company has also been stable, said Swastika Investmart.

"However, there are some industry-specific risks as well, like high capital requirements, interest rate fluctuations, and the risk of non-payment or default. The company reflects a fair valuation that aligns with its growth prospects and risk profile. Consequently, based on its solid fundamentals, attractive valuation, and long-term growth potential, we recommend 'subscribe' rating," it said.

Also read: Top 10 stocks to watch on December 13, 2023: Reliance Industries, Indian Bank, UltraTech Cement, Infibeam Avenues, Rashtriya Chemicals and more

ICICI Securities, Citigroup Global Markets India, Kotak Mahindra Capital Company, and Ambit are the book running lead managers, with Kfin Technologies Limited serving as the registrar for the issue. The company's shares are scheduled to be listed on both BSE and NSE on Wednesday, December 20.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

Also read: DOMS Industries IPO subscribed 4 times on Day 1 so far; retail portion booked 14.75x