However, the stock gave up some of the gains after falling nearly 10% post the debut. It is currently trading at Rs 556, just 12% higher than the IPO price.
Net proceeds from the issue of fresh equity issue will go towards meeting future capital requirements and general corporate purposes.
Analysts said there is still value in holding the stock from a medium- to long-term perspective as the company boasts of strong fundamentals and delivered strong financial performance in the last few years.
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“With credit growth in the housing segment expected to remain robust in the medium term and ISFC commanding premium yields, we advise investors who have received allotment to hold shares from a medium- to long-term perspective and not get swayed away to book listing gains,” said Shreyansh Shah, Research Analyst, StoxBox.
At the upper price band of Rs 493, the company is valued at P/BV of 2.4X with market cap of Rs 5,278 crore post the issue.The company is a retail-focused, affordable housing finance company with an extensive distribution network and a scalable technology infrastructure. Between FY21 and FY23, it witnessed a two-year CAGR growth of 40.8% in terms of assets under management (AUM).
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It offers loans of up to Rs 50 lakh to urban households for construction, extension, renovation and purchase of new homes. It has one of the fastest growing AUMs among housing finance companies in India, high yields and a granular, retail-focused portfolio.
India Shelter Finance has recorded 32% year-on-year growth in its total income at Rs 606 crore for the financial year ended March 2023. Profit for the same period rose 21% to Rs 155 crore.
“The company has a diverse portfolio and strong distribution network, catering to the growing demand for quality and affordable homes. However, investors are advised to book this listing gain. Those who still want to hold it may keep a stop loss at Rs 558,” said Shivani Nyati, Head of Wealth, Swastika Investmart.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)