India Shelter Finance IPO Guidance

When the words- Affordable Housing were not in use, this company had entered the business of financing low cost housing in the small towns of Rajasthan. Yes we are talking about India Shelter Finance, which is one of the PIONEER housing finance company in Affordable housing finance.
It is a retail focused affordable housing finance company with an extensive distribution network comprising 203 branches as of September 30, 2023 and a scalable technology infrastructure across its business operations and throughout the loan life cycle.

Between Financial Year 2021 and Financial Year 2023, it witnessed a two-year CAGR growth of 40.8% in terms of assets under management (“AUM”). Its target segment is the self-employed customer with a focus on first time home loan takers in the low and middle income group in Tier II and Tier III cities in India, and affordable housing loans, i.e., loans with ticket size lower than Rs.25 lac as per the criteria set out in the Refinance Scheme under Affordable Housing Fund for the Financial Year 2021-22 issued by the National Housing Bank.
It has an extensive and well-established network of 203 branches spread across 15 states with a significant presence in the states of Rajasthan, Maharashtra, Madhya Pradesh, Karnataka and Gujarat wherein its branch vintage is five year and above, as of September 30, 2023. It has presence in states which cover 94% of the affordable housing finance market in India, as of March 31, 2023
The company has an integrated customer relationship management and loan management system set up on a cloud-based platform. This provides it with connectivity and access to real time information with a holistic view of the profile of all its customers, throughout the loan lifecycle. Its information technology systems allow it to increase productivity and reduce turnaround times and transaction costs.

Now lets talk of Financial part.
The company has been able to reduce its average cost of borrowings to 8.3% as of March 31, 2023 from 8.7% as of March 31, 2021. Its average incremental cost of borrowings as of March 31, 2023 was 7.9%, as compared to 8.0% as of March 31, 2021. It seeks a disciplined approach to asset liability management.
According to the CRISIL Report, it achieved AUM with a growth of 40.8%, among housing finance companies in India, between Financial Years 2021 and 2023. As of September 30, 2023, approximately 75.7% of its loan portfolio comprises loans with principal amounts less than Rs 15 lac, while 95.0% of its loan portfolio comprises loans with principal amounts less than Rs.25 lac.

Its IPO size is Rs. 1200 crore comprises of Fresh issue of Capital and Offer for sale. IPO size net of Anchor portion is of Rs.840 Cr with Retail portion of Rs. 420 Cr and HNI portion of Rs. 180 Cr. So huge oversubscription is a sure thing.

The shares are offered at PE Multiple of 27.39 and leaves room for listing gains and also returns in the long term investment. The percentage of urbanisation is expected to increase further in the years to come, thereby translating into higher demand for housing and related amenities in the urban areas. Compared to USA and other developed countries, the mortgage to GDP Ratio in India is very low and offers scope for sharp rise in the business and profits, in coming years. Several drivers such as rising urbanization, growing disposable income, favourable demographics and government measures are expected to lead to higher mortgage penetration going forward.
We strongly suggest to APPLY.
We have given below Corporate Video of the company. Do study the same.
👉 Corporate Video Of India Shelter IPO
Wish you Happy Investing.