Explain India Shelter Finance IPO in 500 words
India Shelter Finance Corporation Limited (ISFCL) is a housing finance company that provides loans to individuals from low-income and economically weaker sections of society to purchase or construct their own homes. The company recently made its initial public offering (IPO) to raise funds for its expansion and growth plans.
The IPO of India Shelter Finance was launched on March 21, 2018, and closed on March 23, The company aimed to raise around Rs. 184 crore through this IPO, with a price band of Rs. 56 to Rs. 60 per share. The IPO received a positive response from investors and was oversubscribed by more than 2 times, indicating the strong investor confidence in the company's business model and growth prospects.
India Shelter Finance was incorporated in 1991 and received its license from the National Housing Bank (NHB) in 1997 to carry out housing finance activities. The company primarily focuses on providing loans to the underserved segment of the society, including low-income individuals, self-employed professionals, and those with informal sources of income. These borrowers often face difficulties in obtaining loans from traditional banks and financial institutions due to lack of proper documentation or credit history.
The company has a strong presence in the states of Rajasthan, Gujarat, Madhya Pradesh, and Maharashtra, with a network of 80 branches. It has a customer base of over 20,000 borrowers and a loan portfolio of around Rs. 1,200 crore as of December 31, India Shelter Finance follows a prudent lending approach, with a focus on creditworthiness and repayment capacity of the borrowers. The company offers various loan products, including home loans, home improvement loans, and loans against property.
The funds raised through the IPO will be utilized by India Shelter Finance for expanding its branch network, strengthening its technology infrastructure, and increasing its loan portfolio. The company plans to open around 35 new branches in the next two years, which will help it to reach out to a larger customer base and tap into new markets. The funds will also be used for investing in technology platforms to enhance operational efficiency and customer experience.
India Shelter Finance has a strong management team with extensive experience in the financial services sector. The company is led by Mr. Suvamoy Saha, who has been associated with the company since 2011 and has played a key role in its growth and development. Under his leadership, the company has achieved a CAGR of 53% in its loan portfolio over the last five years.
In conclusion, India Shelter Finance's IPO was a success, indicating the investor confidence in the company's business model and growth prospects. The funds raised through the IPO will be utilized for expanding the company's branch network, strengthening its technology infrastructure, and increasing its loan portfolio. With its focus on serving the underserved segment of the society, India Shelter Finance is well-positioned to capitalize on the growing demand for housing finance in India.