Aadhar Housing Finance Backed By Blackstone ready for a Rs.3,000 Cr IPO

Aadhar Housing Finance Ltd. is a housing finance company targeting the lower-income segment. The company provides a variety of mortgage loan products for residential and commercial property purchase and construction, home improvement and extension. The company has around 470  branches and offices nationwide. These branches and offices are spread across 20 states and Union territories, They operate around  10,926 pin codes throughout India.

Details of the Issue

The IPO is set to hit Dalal Street for its Rs.3000 Crore issue on May 8, The Blackstone-backed company IPO will have a combination of Rs.1000 crore of fresh issue and Rs.2000 crore of Offer for Sale by promoter BCP Topco. BCP Topco is an affiliate of funds managed by Blackstone Group Inc., holding a 98.72% stake in Aadhar Housing Finance.

Aadhar Housing Finance IPO has set a reservation of 50% of the net public issue for Qualified Institutional Buyers(QIB), 15% for Non-Institutional Investors and 35% for retail investors. The offer price range is from Rs.300-315 and the lot size of 1 application for the retail segment is 47. The allotment date for the IPO is to be finalised by May 13 and listing on exchanges will be on May 15. The proceeds from the issue would be used to meet the future capital requirements towards onward lending and the remaining funds towards general corporate purposes.

ICICI Securities, Citigroup Global Markets India, Kotak Mahindra Capital Company, Nomura Financial Advisory and Securities (India), and SBI Capital Markets are the book-running lead managers for this issue.

Financial Track-Record of Aadhar Housing Finance

Blackstone backed Aadhar Housing Finance has maintained a healthy financial track record over the last few years with increasing net profits. The housing finance company’s gross assets under management (AUM) stood at Rs.19,865.2 crore at the end of December FY 2023-24, higher by 20% over the same period in FY 2022-23. 

In FY 2022-23, net profit grew by 22.5% on a YoY basis to Rs.544.8 Crores, Net interest income stood at Rs.1244.3 Crores and Net interest margins(NIM) were at 8%. In the nine months till December FY 2023-24, net profit reported is Rs.548 crores and Net interest income stood at Rs.1170.4 crores with Net interest margins increasing by 100 Bps to 9%.

Conclusion: The Blackstone-backed Aadhar Housing Finance IPO is all set for its Rs.3000 crore debut in the streets, The IPO has shown a good response in the grey market till now, The current grey market premium stands at 30%. Investors should never apply for any IPO by just checking the grey market premium of them. One should do a comprehensive study of Fundamentals and should consult their financial advisors before investing.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.