India Shelter Finance Ltd. is a housing finance company that lends money to customers who want to buy or self-construct residential properties. The company is issuing equity capital to retail investors for the first time in its equity IPO.
In this article, we’re going to give you all the details you need if you’re thinking of subscribing to the listing.
About the company
ISF is a housing finance company and primarily deals in housing loans. The company currently manages over ₹5,180 crore in assets under management as of September 2023. The company mostly deals with small loans to home buyers, with more than 75% of their assets under a ticket price of ₹15 lakh. 95% of the loans issued to borrowers are under a ticket size of ₹25 lakh.
Currently, ISF has more than 200 branches spread across 15 states in India, concentrated in Rajasthan, Maharashtra, Madhya Pradesh, Karnataka, and Gujarat.
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Financial summary
Here is a brief financial summary of the company for the last 3 financial years.
| Particulars | March 31, 2021 | March 31, 2022 | March 31, 2023 |
| Revenue | 317 | 448 | 584 |
| Profit / Loss | 87 | 128 | 155 |
| EPS | – | – | – |
| Net Cash Flow | 216 | 97 | 351 |
₹ in crore, except share data or when otherwise stated.
| Metric | 2021 | 2022 | 2023 |
| Gross Margin | 68.7% | 69.1% | 68.3% |
| PAT Margin | 35.6% | 28.5% | 26.5% |
| ROE | N/A | N/A | 13.4% |
| ROCE | N/A | N/A | 11.2% |
The company’s total income grew by a CAGR of more than 35% over FY 21-23, while the net profit margins remained healthy.
Experts also say that the company generated ROE and ROA of 13.4% and 4.1% for FY23. They have also been able to maintain their average sanction loan to value on portfolio at 50.9%.
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The IPO offer
The IPO offer for the company opened on 13th December and ends on 15th December. On the first day of bidding, by 11:45 AM, the public issue had been subscribed 0.38 times, and the retail portion was subscribed 0.63 times.
The per share price is estimated to be around ₹469 to ₹493 per share. In the grey market, the IPO share is commanding a ₹152 premium.
It plans to raise ₹1,200 crore through the issue of shares in totality. If you bid for these shares, you’ll have to buy a lot of 30 shares at once, which means that you’ll end up paying anywhere from ₹14,070 to ₹14,790 per lot.
Overview of the product market
ISF Corporation Ltd. was previously known as Satyaprakash Housing Finance India Limited. It has been engaged in housing finance since 1998, and their target customer is a self-employed person with a focus on first-time home loan takers.
The company mostly operates in Tier II and Tier III cities in India and offers attractive and affordable house loan interest rates to customers, mostly under a ticket size of ₹25 lakh per loan.
Peer comparison
Here is a brief comparison of ISF’s peers in the stationery business in India, and how they compare under key financial metrics.
| Company | P/E Ratio | Div. Yield | ROCE |
| LIC Housing Finance | 7.04 | 1.59% | 7.57% |
| PNB Housing | 15.76 | 0% | 8.27% |
| Indiabulls Housing Finance | 9.04 | 0.59% | 9.79% |
| HUDCO | 12.80 | 3.34% | 8.81% |
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Risks and strengths
Risks
- The company has a low interest coverage ratio
- Low return on equity numbers for the last 3 years, at 12.1%
Strengths
- Company has healthy and increasing margins
- Revenues have been growing year over year for the past 3 years
Conclusion
Experts estimate that subscribers to the IPO could make approximately 30-35% return from the listing price, but this is entirely up to speculation. We encourage you to research the company independently and then make an informed decision.
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