Aptus Value Housing Finance IPO: Information analysis

Aptus Value Housing Finance is a retail lending company that targets low- and middle-income consumers having housing requirements. Unlike others, it focuses only on southern states, owing to their higher-than-average GDP growth and primarily serves self-employed customers in rural and semi-urban markets of India. Started in 2010 by Mr M Anandan, who spent two decades in the lending industry and retired as the managing director of Cholamandalam DBS Finance, the company is promoted by WestBridge Capital and Mr Anandan. The company offers loans for purchasing or constructing houses and improving or extending houses. Besides, it offers loans against property and business loans. All its loans are fully secured and the company has never faced any loan fraud in its entire operating history. Strengths Asset quality: With the gross non-performing assets (NPAs) of just 0.68 per cent as on March 31, 2021, the company's asset quality is excellent. And most importantly, this was achieved despite all COVID-related economic disruptions. It ultimately indicates that the company's lending process is quite strong. Even the three-year average GNPA of 0.6 per cent is amongst the lowest in the affordable home-finance industry. Net NPAs and credit costs are also amongst the lowest in its peer group. It has never restructured any loans or written off any loans since its inception. Balance sheet: Apart from the quality of the loans, the balance sheet is quite strong in terms of its two additional factors. Its capital adequacy ratio (CAR) is 73.6 per cent and therefore, is extremely well capitalised. The company also has the lowest leverage (only 1.1 times its equity) amongst peers and these two factors together give the company a lot of headroom for growth. Growth history: The company has grown in a spectacular manner. Its AUM has grown at a 42 per cent CAGR during the period FY18-FY21. And at the same time, its profit after tax has compounded at almost 60 per cent. The company plans to continue lending in its existing target segment and increase its target segment only to adjoining areas