Aavas Financiers Slides 13% Over IPO Price On Stock Market Debut

Aavas Financiers Ltd. listed at a discount of 7.67 percent at Rs 758 per share on the BSE Ltd., compared to its issue price of Rs 821. The stock fell as much as 13 percent to Rs 710 thereafter.

The housing finance company's Rs 1,734-crore initial public offering saw 97 percent subscription on its final day of bidding with the highest demand coming from qualified institutional buyers. The company received bids for 1.4 crore shares at the end of its IPO offering.

The firm raised Rs 520 crore from 34 anchor investors, including AU Small Finance Bank, Abu Dhabi Investment Authority-Behave, DSP Blackrock Tax Saver Fund, SBI Life, Bajaj Life Insurance and Morgan Stanley India Investment.

Business

Aavas Financiers, which started operations in March 2012 to fund affordable housing, is an erstwhile subsidiary of AU Small Finance Bank. The lender, now promoted by private equity firms Kedaara Capital and Partners Group, mainly offers low-ticket, high-yield loans to low-income rural and semi-urban self-employed borrowers.

The company's portfolio comprises loans for purchase, construction, repair/renovation and extension of homes. It also offers loans against property. Aavas operates through a network of 165 branches covering 95 districts across eight states: Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Haryana, Delhi, Uttar Pradesh and Chhattisgarh. Rajasthan contributes 47 percent of its loan book.

Financials