India Shelter share price debuts at 25% premium, should investors buy, sell or hold? Experts answer
- India Shelter Finance shares were listed at ₹620 apiece on NSE, a premium of 25.76% to the issue price of ₹493 per share.
India Shelter IPO Listing: India Shelter Finance Corporation Ltd made a decent Dalal Street debut on Wednesday as the stock was listed with more than 25% premium to the issue price. India Shelter Finance shares were listed at ₹620 apiece on NSE, a premium of 25.76% to the issue price of ₹493 per share.
However, soon after the listing, India Shelter share price declined more than 8% as investors took some profit off the table.
Analysts believe investors of India Shelter Finance IPO should book part profit after share listing and can keep the rest of the shares for the long term.
“India Shelter Finance Corporation Ltd did a stellar debut delivering returns to its investors. The company is one of the fastest growing assets under management among housing finance companies in India, it offers extensive and diversified Phygital distribution network with significant presence in Tier II and Tier III cities, in-house origination model to ensure efficient, robust underwriting, collection and risk management systems, with technology and analytics-driven company with scalable operating mode, and diversified financing profile with a demonstrated track record of reducing financing costs,” said Mahesh Ojha, AVP – Research & Business Development, Hensex Securities Pvt Ltd.
He suggests investor shall book at least 50% profits on the listing day itself rest can be held for long term investment
On BSE, India Shelter Finance share price began trading at a premium of 24.28% at ₹612.70 apiece.
At 12:10, India Shelter Finance shares were trading 8.27% lower at ₹562.00 apiece on the BSE. The stock was down 9.18% at ₹563.10 apiece on NSE.
India Shelter Finance IPO Details
India Shelter Finance IPO opened for subscription on December 15 and concluded on December 18. The public issue saw strong demand from investors as it was subscribed 38.59 times in total.
The public issue was subscribed 10.46 times in the retail category, 94.29 times in the Qualified Institutional Buyers’ (QIB) category, and 29.97 times in the Non-Institutional Investors’ (NII) category by December 15.
The ₹1,200 crore India Shelter IPO was a combination of fresh issue of 1.62 crore equity shares aggregating to ₹800 crore and an offer for sale (OFS) of 81 lakh shares aggregating to ₹400 crore.
India Shelter Finance IPO price band was set at ₹469 to ₹493 per share. The IPO lot size was 30 shares.
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About India Shelter Finance Corporation
India Shelter Finance Corporation Ltd is a retail-focused affordable Housing Finance Company (HFC) specializing in Tier-2, Tier-3, and rural regions. Incorporated in 1998, the company provides loans for house construction, extension, renovation, and the purchase of new homes or plots. The company also offers loans against property (LAP).
The company offers loan amounts ranging from ₹5 lakh to ₹50 lakh for a tenure of up to 20 years. The company has a network of 203 branches spread across 15 states, with 203 branches as of September 30, 2023.
India Shelter Finance Corporation Ltd is backed by marquee institutional investors such as West Bridge Capital and Nexus Venture Partners. The company has an AUM of ₹5,181 crore in H1FY24, up from ₹2,199 crore in FY21, which grew at a CAGR of 41%, indicating its growing financial position.
As of November 30, 2023, India Shelter Finance disbursed loans worth over ₹5,500 crore.
The company has a network of 203 branches spread across 15 states, as of September 30, 2023.
India Shelter Finance Corporation Financials
India Shelter Finance Corporation’s net interest income rose to ₹293 crore in FY23 reflecting a 32% CAGR between FY21-23 while net profit increased from ₹87 crore to ₹155 crore at a 33% CAGR during the same period.
The net interest margin was 8.9% in FY23, while return on assets and return on equity were 4.1% and 13.4% during the same period.
The company’s average cost of borrowing has reduced to 8.3% in FY23 from 8.7% in FY21, primarily due to its improved financial performance and credit rating.
Gross NPA ratios for FY22, FY23, and H1FY24 were 2.1%, 1.1%, and 1.0%, and their respective Net NPA ratios were 1.6%, 0.9%, and 0.7% indicating an improvement in asset quality.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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