India Shelter Finance Corporation Ltd (ISFC) made a strong stock market debut Wednesday as its shares listed at a premium of a little more than 24% to its issue price before paring some gains.
Shares of the non-bank lender began trading on the BSE at Rs 612.70 apiece versus the initial public offering price of Rs 493, stock-exchange data show. The shares traded in a range of Rs 567.60-625.00 in the first few minutes.
The strong start comes after the company’s IPO was subscribed 36.71 times last week. The offering of 17.91 million shares, excluding the anchor investors’ portion, got bids for 657.5 million shares, stock-exchange data show.
Institutional investors came in droves as the portion of shares reserved for them was covered almost 90 times. The quota of non-institutional investors was covered over 29 times while retail investors bid for almost 10 times the shares set aside for them.
Ahead of the IPO, India Shelter Finance raised Rs 360 crore from anchor investors. The total IPO size, including the anchor portion, was Rs 1,200 crore ($145 million). The IPO comprised the mortgage lender issuing fresh shares to raise Rs 800 crore and two of its existing investors offloading shares worth Rs 400 crore.
Private equity firm Madison India Capital, which recently floated a new fund about six years after it closed its fourth investment vehicle, sold shares worth Rs 257.5 crore while venture capital firm Nexus Venture Partners divested shares worth Rs 142.5 crore.
The two investors tweaked their plan to harvest money from the portfolio company they backed six years and 11 years ago, respectively, VCCircle reported previously. They were earlier looking to sell shares worth Rs 800 crore.
ISFC also counts PE firm WestBridge Capital Partners as an investor. WestBridge didn't sell any shares in the IPO.
ISFC offers small-ticket home loans of Rs 300,000 to Rs 2.5 million. It got its first external funding in July 2010 when Sequoia Capital India, now known as Peak XV Partners, invested Rs 30 crore in a Series A round and picked up a 51% stake in the company. In 2012, Sequoia was joined by Nexus in the cap table.
In 2015, WestBridge joined as the lead investor in a large deal worth around Rs 280 crore. Nexus and Sequoia also chipped in with primary as well as secondary purchase of shares from the promoters. ISFC raised Rs 195 crore in 2017 and a similar amount in 2018 from WestBridge, Nexus, Sequoia and Madison through fresh allotments.