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ISF IPO open till 15th December: Should you apply?
All the details you need to know to subscribe to the listing of India Shelter Finance Ltd. on the stock exchange!

ISF IPO

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.

ParticularsMarch 31, 2021March 31, 2022March 31, 2023
Revenue317448584
Profit / Loss87128155
EPS
Net Cash Flow21697351

₹ in crore, except share data or when otherwise stated.

Metric202120222023
Gross Margin68.7%69.1%68.3%
PAT Margin35.6%28.5%26.5%
ROEN/AN/A13.4%
ROCEN/AN/A11.2%

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%.

Also Read: DOMS – the stationery maker’s IPO!

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.

CompanyP/E RatioDiv. YieldROCE
LIC Housing Finance7.041.59%7.57%
PNB Housing15.760%8.27%
Indiabulls Housing Finance9.040.59%9.79%
HUDCO12.803.34%8.81%

Also Read: Tata technologies IPO after 20 years in the TATA conglomerate.

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.

Keep following the StockGro blog for more updates on IPO listings!

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Devansh Sinhal

I am passionate about stock investing and have a knack for simplifying complex market concepts. Providing readers with valuable insights and empowering them to make informed investment decisions is my jam.

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