Aavas Financiers Limited IPO – Company Profile, Price, Analysis
Aavas Financiers Limited (Formerly known as Au HOUSING FINANCE LIMITED) – engaged in the business of providing Housing Loans, is planning to raise INR 1,729.2 Cr – 1,734.1 Cr via initial public offer (IPO) – [Fresh Issue (INR 400 Cr) and Offer for Sale (INR 1,329.2 – 1,334.1 Cr)]
Aavas Financiers – Company Profile
Incorporated in the year 2011, Jaipur (Rajasthan) based Aavas Financiers Limited is a company engaged in the business of providing retail, affordable housing finance to low and middle income self-employed customers in semi-urban and rural areas in India.
AAVAS – Business Products
Aavas Financiers is engaged in three types of products mentioned below under its housing finance business –
- Finance for Purchase: The product is designed to purchase individual dwelling units, flats in low cost buildings, detached and semi-detached units, cluster units, and residential units. This is also applicable for properties under construction or ready built property.
- Finance for Construction: The product is designed to offer loans for construction on a plot of land, which has been already acquired.
- Finance for Home Extension: This product is designed to offer loans to individuals for extension of an existing home unit, which can include construction of additional rooms, floors etc.
Aavas Financiers – Business Segment
- Aavas Financiers Limited is primarily engaged in the business of providing housing loan to customers belonging to low and middle income segment in semi-urban and rural areas.
- Target Customers: Company believes that these are the people who are either self-employed, running small businesses like providing transportation facilities in auto rickshaw or other vehicles, running grocery shops, tiffin centers, beauty parlours and other businesses or these customers are carrying out business of agri or animal husbandry products in rural areas or salaried class people who are carrying out small jobs in private or public sector.
- Company further believes these are credit worthy customers who may or may not have the income proof documents like salary slip, IT return, and hence are financially excluded by other large housing finance companies and banks. AAVAS uses unique appraisal methodology to assess these customers individually.
Aavas Financiers – Area of Operations & Branches
Aavas Financiers caters the needs of various small families in rural areas, towns, and a city’s peripheral area and other semi-urban areas to meet their life time dream to own their own house.
Currently Aavas Financiers is operating in 8 states namely Rajasthan (75 branches), Chattisgarh (5 branches), Delhi (2 branches), Gujarat (29 branches), Haryana (6 branches), Maharashtra (36 branches), Madhya Pradesh (29 branches), and Uttar Pradesh (4 branches)
Aavas Financiers – License
Aavas Financiers Limited got registered with National Housing Bank (subsidiary of Reserve Bank of India) as a Housing Finance Company (HFC) and awarded the license from National Housing Bank (NHB) in August 2011.
The Company has received the ASSOCHAM Excellence Award for being the best housing finance company in affordable housing in 2016.
Company Promoters
Promoters of Aavas Financiers Limited are (1) Lake District Holdings Limited and (2) Partners Group ESCL Limited
IPO Opening / Closing Date
IPO Details – Price, Minimum Bid and Other
Aavas Financiers – Financial Performance
Revenues
Aavas Financiers Limited shows a steady revenue growth in last 5 years. Top-line has been increasing regularly for the last five years and jumped from INR 54.32 Cr in FY 2014 to INR 457.24 Cr for the period ended FY 2018.
Profits
Though the company has shown a steady growth in revenue, the company has also registered growth in profits in these five years. Starting from INR 6.3 Cr of profits in FY 2014, the company’s earnings improved to INR 92.93 Cr for the period ended FY 2018.
CONCLUSION –
Considering company’s valuation and financial parameters, FinBlab recommends DO NOT SUBSCRIBE ratings (for the time being) on Aavas Financiers Limited IPO
Also Read –
1) Finblab’s Valuepick Stock for the month of September 2018 – HIL Limited
2) GARDEN REACH SHIPBUILDERS & ENGINEERS IPO
3) TOP 5 REASONS WHY INDIAN RUPEE IS FALLING AGAINST US DOLLAR
4) TOP 6 REASONS WHY COMPANIES GO FOR A SHARE BUYBACK
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