India Shelter Share Price Highlights: India Shelter Finance share price tanks over 10% on listing day

India Shelter Finance share price dipped 10% after making a decent debut on stock exchanges. On BSE, India Shelter shares ended at ₹556.00 apiece, down 9.25% from listing price of ₹612.70. However, the stock closed up 12.78% from issue price.

On NSE, India Shelter Finance shares ended at ₹555.00 apiece, 10.48% lower than listing price of ₹620.

India Shelter Finance has demonstrated robust growth in its loan portfolio, achieving an impressive CAGR of 35%. The portfolio surged from ₹1,981.2 crore in FY21 to ₹3,609.1 crore in FY23. As of September 30, 2023, the company’s AUM has witnessed a substantial increase, reaching ₹5,180.7 crore. However, it is noteworthy that the Capital Adequacy Ratio (CAR) experienced a decline from 71.5% in FY21 to 52.7% in FY23. 

In the same fiscal year, the company’s borrowing escalated to ₹2,988.9 crore from ₹1,491.3 crore in FY21. Consequently, there was a marginal increase in the debt-to-equity ratio, rising from 1.6x to 2.4x. The RoE has shown improvement, rising to 13.4% in FY23 from 9.8% in FY21.

The promoters of the India Shelter Finance are Anil Mehta, WestBridge Crossover Fund, LLC and Aravali Investment Holdings.

India Shelter Finance Corporation is a housing finance company that caters to retail customers, specifically targeting the low and medium-income groups in Tier II and Tier III cities in India. The company has consistently demonstrated growth in both its revenue and profits. At the higher price band of ₹493, India Shelter Finance’s issue was priced at a P/BV of 2.4x based on post-issue adjusted book value per share (BVPS), representing a discount compared to its peer group’s average P/BV of 4.2x. However, even with this apparent discount, India Shelter Finance’s financial ratios do not appear as impressive as those of its competitors, analysts said

India Shelter Finance share price declined over 9% than its listing price. At 1:30 pm, India Shelter Finance shares were trading 9.82% lower at ₹552.55 apiece on the BSE. However, the stock was still higher by 12.08% than its issue price.

The housing finance sector of India comprises public sector banks, private sector banks, housing finance companies, non-banking financial companies and other players. The overall size of the affordable housing finance market in India in terms of loan outstanding was around ₹11.5 trillion as of March 2023, constituting around 37% of the overall housing finance market. The Indian housing finance market recorded a CAGR of approximately 13.5% (growth in loan outstanding) over the financial years 2019-2023 on account of a rise in disposable income, healthy demand, and a greater number of players entering the segment.

As per India Shelter Finance IPO RHP, three states contributed 62.7% of AUM of and 57.6% of branches and any adverse developments in these states could have an adverse effect on business. 

The self-employed customers, accounting for 70.6% of AUM, are often considered to be higher credit risk customers due to their increased exposure to fluctuations in cash flows.

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. Read full report here

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 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. 

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.

India Shelter Finance share price dropped over 6% from its listing price to trade around ₹575 apiece on the BSE. However, the stock was still higher than its issue price. India Shelter Finance commanded a market capitalization of ₹6,150 crore on BSE.

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.

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. 

India Shelter Finance Corporation Ltd did a stellar debut delivery 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 at Hensex Securities Pvt Ltd.

He suggests investors shall book at least 50% profits on the listing day itself rest can be held for long term investment.

India Shelter Finance share price fell over 8% after making a decent debut on the stock exchanges. India Shelter Finance shares were trading 8.11% lower at ₹563.00 apiece on the BSE after listing at ₹612.70.

On NSE, India Shelter Finance shares declined 8.94% to ₹564.60 from its listing price of ₹620 apiece.

India Shelter Finance share price began trading at a premium of 24.28% at ₹612.70 apiece on BSE.

India Shelter Finance Corporation made a decent stock market debut on Wednesday, December 20. India Shelter Finance shares were listed at ₹620 apiece on NSE, a premium of 25.76% to the issue price of ₹493 per share.

On BSE, India Shelter Finance share price began trading at a premium of 24.28% at ₹612.70 apiece.

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.

Arun Kejriwal, Founder of Kejriwal Research & Investment Services said that the response to Indian Shelter was far lower than what DOMS Industries had received in terms of subscription.

“Secondly, the business in which India Shelter is, that is home loan finance, is a very competitive industry with a number of players including NBFCs, housing finance cos, and banks whether private or public, all offering loans. Compared to the listing you would see similar listing gains on the share. I believe a premium of about ₹150 or ₹170 to the IPO price is what one should expect when India Shelter lists,” he added.

Avinash Gorakshakar, Head Research of Profitmart Securities expects India Shelter Finance to get listed at a significant premium. 

“Firstly it has been oversubscribed about 36 times and the company’s business is also very well established. I think you should be able to get at least minimum 50%-60% listing gains immediately, it could be even more. But conservatively 50-60% is most likely. The way the markets are, most of these IPOs are opening with a premium,” Gorakshakar said.

India Shelter Finance IPO GMP today is ₹157 per share. This indicates that the India Shelter share price is trading higher by ₹157 than its issue price, in the grey market. Considering the GMP today and the issue price, India Shelter estimated listing price is ₹650 per share, which is at a premium of 31.85% to the IPO price.

India Shelter IPO 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.

India Shelter Finance IPO bidding began on December 13 and ended on December 15. India Shelter IPO allotment was finalized on Monday, December 18, while the shares will be listed today.

India Shelter Finance Corporation Ltd will make its stock market debut today on December 10. India Shelter Finance shares will be listed on both the stock exchanges, BSE and NSE, today after the conclusion of its IPO.