ICRA said that the rating action factors in Aptus' strengthened capital profile and track record of maintaining healthy profitability and asset quality. ICRA takes note of the fresh equity infusion of Rs 500 crore pursuant to the initial public offering (IPO) in August 2021, that strengthened the capitalisation profile. The current capital profile would comfortably support portfolio growth, which is expected to be about 25-30% per annum, over the medium term.

Aptus' gross stage 3 (GS3) remained at 0.8% as of September 2021 compared to 0.7% in March 2021 (1.1% as of June 2021) and the standard restructured book stood at 1.5%. ICRA takes note of the elevation in the softer bucket overdues post the Covid-19 pandemic, while slippages to harder buckets were contained.

The rating continues to factor in the prudent internal controls and underwriting policies that support the asset quality performance. Aptus had increased its overall provision coverage ratio (PCR) to 0.7% of the gross carrying value (GCA) as of September 2021 from 0.4% as of March 2021.

The rating takes cognizance of Aptus' limited portfolio seasoning, high share of non-housing loans, moderate borrower profile and its geographically concentrated operations with Tamil Nadu and Puducherry together constituting 50% of the total portfolio as of September 2021, notwithstanding the improvement from 72% in March 2017.

Chennai-based Aptus Value Housing Finance India is a housing finance company (HFC). Its target borrowers are from the low to middle-income segments. Its target geographies are the southern states, with a focus on rural and semi-urban areas. Aptus is largely focused on self-employed customers with limited or no documentary evidence of their income and with limited access to funding from banks and larger HFCs.

On a consolidated basis, the company reported a 30.6% rise in net profit to Rs 85.26 crore on a 29.4% rise in total income to Rs 203.24 crore in Q2 FY22 over Q2 FY21.

Shares of Aptus Value Housing Finance ended 1.50% higher at Rs 342.60 yesterday.