Structure of this IPO and the company's background

Educational insights
1

India Shelter Finance recently filed draft papers for a massive Rs 1,800 crore IPO. Can someone shed light on the structure of this IPO and the company’s background, especially considering its focus on affordable housing in Tier II and Tier III cities?

2

The recent announcement by India Shelter Finance Corporation about their upcoming IPO has stirred quite an interest in the financial community. Here’s a breakdown of the details and the company’s background:

1. IPO Structure:

  • Total IPO Size: Rs 1,800 crore.
  • Equity Breakdown:
  • Fresh issuance of equity shares: Rs 1,000 crore.
  • Offer for Sale (OFS) by existing investor shareholders: Rs 800 crore.
  • IPO Reservation:
  • Qualified institutional buyers: 50%.
  • Non-institutional investors (NIIs): 15%.
  • Retail investors: 35%.
  • Prominent Entities in OFS: Catalyst Trusteeship Ltd, Madison India Opportunities IV, MIO Starrock, Nexus Ventures III Ltd, and Nexus Opportunity Fund II.
  • Utilization: Proceeds from the fresh issue are earmarked for future capital needs, specifically for onward lending and other general corporate purposes.

2. Background of India Shelter Finance:

  • Previous Name: Satyaprakash Housing Finance India.
  • Business Profile: Primarily, they provide housing finance services. Their main clientele consists of self-employed individuals, particularly those applying for home loans for the first time.
  • Target Demographics: They focus majorly on low and middle-income groups in Tier II and Tier III cities in India.
  • Geographical Presence: The corporation has an impressive reach with over 183 branches across 15 states. They have a significant foothold in states such as Rajasthan, Maharashtra, Madhya Pradesh, Karnataka, and Gujarat.
  • Unique Selling Proposition: Their advanced technological infrastructure and expansive distribution network give them a competitive edge in the market. Backing from industry giants like Westbridge Capital and Nexus Venture Partners further strengthens their position.
  • Management of the IPO: Esteemed institutions like ICICI Securities, Citigroup Global Markets India, Kotak Mahindra Capital Company, and Ambit are the designated book-running lead managers for this IPO.

3. Inference:

India Shelter Finance, with its strong emphasis on affordable housing finance, especially in Tier II and Tier III cities, indicates its commitment to support the housing needs of the non-metropolitan populace. This IPO, by the looks of its structure and the company’s impressive track record, appears to be a significant move in the housing finance segment.