Repco Home Finance Ltd IPO Review (Subscribe)

Review By Dilip Davda on Mar 6, 2013

Repco Home Finance Ltd. (RHFL)-is a professionally managed housing finance company having its headquartered in Chennai, Tamil Nadu. It was incorporated in April 2000 as a wholly owned subsidiary of the Repatriates Co-operative Finance and Development Bank Limited ("Repco Bank Limited"), a Government of India enterprise, to tap the growth potential in the housing finance market and is registered as a housing finance company with the NHB.

RHFL is currently operating through 56 branches and 20 satellite centres in Tamil Nadu, Andhra Pradesh, Kerala, Karnataka, Maharashtra, Odisha and Puducherry. The mission of RHFL has been to translate into reality the aspirations of people to own a house by covering the market -existing and potential- comprehensively through institutional credit support customized to suit individual needs in a transparent and ethical way. The salient and unique features of RHFL are innovative loan products, direct customer contact and customer ownership, focus on quality customer servicing, transparency and speed of operations, focus on relatively under-penetrated markets and balanced portfolio mix, robust risk management systems and processes, low cost operations, well recognized brand in south India with an established track record, stable and experienced senior management team. The loans schemes of RHFL are dream home loans, home makeover loans, mortgage loans, plot loans, commercial construction loans, NRI loans and loans for fifty-plus individuals.

The company has witnessed a steady growth in the past by increasing its geographical footprint by deepening reach selectively in existing regions and expanding to new regions, continuing focus on under penetrated markets, maintaining strong asset quality through continued focus on risk management, accessing low cost and diversified sources of funds, and maintaining low operating costs. To augment the capital base and listing of its share, the company is coming out with a Book Building Process IPO for 15720262 equity share of Rs. 10 each within a price band of Rs. 165-172 and the issue is opening for subscription on 13.303.13 and will close on 15.03.13. Minimum application is to be made for 75 shares and in multiples thereof. SBI Capital Markets Ltd, IDFC Capital Ltd and JM Financial   Consultants Pvt. Ltd are the BRMs and Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE and NSE. ICRA has assigned "IPO grade 3" indicating average fundamentals of the company. Through this issue company hopes to raise Rs. 259.38 - 270.39 crore based on lower and higher price band.


Conclusion / Investment Strategy

On performance front, the company has posted an average EPS of Rs. 13.01 for last three fiscals and for first six months ended 30.09.12 Rs. 7.67 (Not annualized). Thus the asking price is at a P/E of 12 plus on the existing equity of Rs. 46.44 crore which will stand enhanced to Rs. 62.16 crore post this issue. Attribution of these earnings on expanded equity translates asking price at around 15.5 P/E. Its NAV as on 30.09.12 is Rs. 72.97, thus offer is at a P/BV of 2.26 and compares well with leading peers like LIC HF, HDFC, Gruh Finance etc.

On BRLM's mandate performance front the data represents the total issues managed / number of issues failed to give listing gain respectively - SBI Cap (20/9), IDFC (11/4) and JM Financial (24/8). However, considering the fancy for housing finance companies, moderate investment is recommended.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Mar 6, 2013

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com

Repco Home Finance IPO FAQs

  1. 1. Why Repco Home Finance IPO?

    The initial public offer (IPO) of Repco Home Finance Ltd offers an early investment opportunity in Repco Home Finance Ltd. A stock market investor can buy Repco Home Finance IPO shares by applying in IPO before Repco Home Finance Ltd shares get listed at the stock exchanges. An investor could invest in Repco Home Finance IPO for short term listing gain or a long term.

  2. 2. How is Repco Home Finance IPO?

    Read the Repco Home Finance IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Repco Home Finance IPO what should investors do?

    Repco Home Finance IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Repco Home Finance IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Repco Home Finance IPO good?

    Our recommendation for Repco Home Finance IPO is to subscribe.

  5. 5. Is Repco Home Finance IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Repco Home Finance IPO.

  6. 6. When will Repco Home Finance IPO allotment status?

    The Repco Home Finance IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Repco Home Finance IPO allotment status to check.

  7. 7. When will Repco Home Finance IPO list?

    The Repco Home Finance IPO will list on Monday, April 1, 2013, at BSE, NSE.








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