Aavas Financiers sets price band of Rs 818-821 for IPO

MUMBAI: Aavas Financiers, a Jaipur-based home-financier, has fixed the price band for its initial share sale at between Rs 818 and Rs 821. The minimum lot size for the IPO is 18 shares.

The company provides housing finance, primarily to low- and middle-income group customers, in rural and semi-urban areas. At the higher end of the price band, Aavas shares will have a P/B of 5.2. Industry leaders HDFC, PNB and India bulls Housing Finance have P/B ratios of 3.5, 3.4, and 3.8, respectively.

CEO Sushil Kumar Agrawal said the company has the necessary expertise in assessing the credit-worthiness of self-employed customers and borrowers without credit scores. He added that the company competes in locations where it has a price advantage.


“…our branches are in locations where the population is less than 10 lakh, where our competitors are the nationalized banks, smaller NBFC, HFC and cooperative banks. There, we have a pricing advantage…,” Agrawal said.

Justifying the P/B implied by the price band, Agrawal said: “We know how to assess (our target clients). We have a 100 per cent retail loan book with an average ticket size of less than Rs 10 lakh and only 50 per cent loan to value and 33 per cent instalment to income ratio.”

He added that the company maintained gross NPA of 0.5 per cent over five years and RoA of 2.5 per cent over the past six years.