PE-backed Aavas Financiers’ IPO crosses one-fourth mark on second day
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The initial public offering (IPO) of home-loan company Aavas Financiers Ltd crossed the one-fourth mark on the second day on Wednesday, thanks to institutional demand.

The IPO of 14.78 million shares, excluding the anchor allotment, received bids for 4.31 million shares. That amounts to a subscription of 29.2% at the end of day two, stock-exchange data showed.

Institutional buyers bid for 3.43 million shares, or 81% of the shares reserved for them, while the portion set aside for retail investors was covered 6.8%.

Non-institutional investors (corporate bodies and wealthy individuals) used up 12% of their quota.

The IPO, which will close on Thursday, saw a slow start on the first day on Tuesday, getting subscribed 4.4%.

Ahead of its IPO, Aavas had raised Rs 520 crore ($71.3 million) by selling shares to anchor investors, including the sovereign wealth funds of Abu Dhabi and Kuwait as well as PremjiInvest,  the family investment arm of Wipro Ltd chairman Azim Premji.

Jaipur-based Aavas, which counts homegrown private equity firm Kedaara Capital and Swiss investment company Partners Group as its backers, had filed its IPO draft prospectus in June with the Securities and Exchange Board of India (SEBI).

The IPO comprises of fresh shares worth Rs 400 crore and 16.24 million shares of private equity firms as well as members of Aavas’ management. Kedaara and Partners Group will together sell 15.21 million shares in the IPO, or one-fourth of their respective stake in the company.

Aavas provides housing loans to low- and middle-income segments in semi-urban and rural areas.

The lender was incorporated in February 2011 and started operations in March 2012. It had disbursed a total of Rs 3,444 crore as of 31 March 2017, according to its annual report.

Aavas will join a host of housing finance companies and non-banking financial companies that have gone public over the past two to three years.

ICICI Securities, Citigroup Global Markets India, Edelweiss Financial Services, and Spark Capital Advisors (India) are the merchant bankers managing Aavas’ IPO.

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