IPO-bound Aptus focuses on non-metro markets

The Chennai-based entity caters to the lower and middle income population with loan ticket sizes of Rs 5 to 25 lakh, so that the self-employed, small business owners, vendors and hotels, among others, can build homes. “While fairly big players like HDFC dominate the housing finance segment, there is no room for smaller players, especially in affordable housing. We identified the opportunity for catering to this segment, making available home loans to those in tier III and IV areas. Our focus is not the metros but suburbs, district headquarters or taluks. Over 80 pc of our disbursals are these customers, who are otherwise considered a high-risk category by credit agencies,” says Anandan. 

After joining Murugappa group in 1976 as a management trainee, Anandan rose to become the MD of Cholamandalam Investments and later Chola MS General Insurance while serving the group’s diverse verticals (retail auto finance, gold loans). He hung up his boots in 2008. But, soon after he took up Board roles in firms such as Equitas (where he spearheaded the micro finance business as a co-founder) and Manappuram Finance. 

Unsatisfied with his non-executive and advisory roles in some of the firms, where he was part of the core team, he says, “The urge to start something on my own led me to creating Aptus, which in Latin means appropriate,” says Anandan, adding that while sanction takes only 4 to 5 days, the legal documentation process or the other formalities such as title clearance, land record verification, depends on government departments. 

Boasting of an NPA under 1 pc, the 10-year-old Aptus, which is an IPO debutant, believes in having a quality portfolio that will lead to minimal delinquencies. The CMD oversees 190 branches (78 in TN) covering four southern states except Kerala. With 2,000 plus staff and 65,000 customers, Aptus has a home loan portfolio of over Rs 4,070 crore. Its revenue in FY21 was Rs 636 core while its profit after tax stood at Rs 265 crore. 

“The average size of loan is Rs 9 lakh while the EMIs work out to Rs 12,500,” says Anandan, as he notes that collections have picked up in June (98%) and July (99.96%) after a dip in May (88%). Though COVID-19 did hit the Q1 growth, in FY21, its loan book grew 28% while profits surged 40%. Nearly 52% of its revenues come from TN while 28 per cent from Andhra. Telangana and Karnataka contribute 10 per cent each. 

Banking on the first-mover advantage, it has no intention of becoming a pan-India player though contiguous growth plans will see its foray into Maharashtra, Odisha and Chhattisgarh by this year. “We would like to be market leader state by state and our aim is to have deeper but not wider operations,” signs off the 71-year-old Anandan.