All you need to know about Aadhar Housing Finance ahead of IPO launch on May 8

Aadhar Housing Finance IPO latest news and updates: Another mainline initial public offering (IPO) that is creating buzz in the Indian primary markets is that of Aadhar Housing Finance Ltd, the country’s largest low-income housing finance firm.

The ₹3,000-crore Aadhar Housing Finance IPO is set to open for subscription on Wednesday, May 8.

Aadhar Housing Finance IPO price band has been fixed at ₹300-315 per share of face value of ₹10 each. The minimum lot size for retail investors in 47 shares.

The public issue is a mix of fresh issuance of 3.17 crore shares worth ₹1,000 crore and OFS (offer-for-sale) of 6.35 crore shares worth ₹2,000 crore. Aadhar Housing Finance is expected to use the money to meet capital requirements for onward lending and for general corporate purposes.

If you are planning to invest in the Aadhar Housing Finance IPO, here are some important details you should know about the company and its business.

Aadhar Housing Finance operations

The erstwhile Aadhar Housing Finance Ltd was incorporated in 2010 and later amalgamated with DHFL Vysya in November 2017. The company was renamed Aadhar Housing Finance Ltd on December 4, 2017. The world’s largest alternative asset manager Blackstone, through its subsidiary BCP Topco VII Pte Ltd, owns 98.72% stake in Aadhar Housing Finance Ltd.

Aadhar Housing Finance focuses on low-to-middle income clients who require small-ticket mortgage loans. It currently provides financing solutions to all segments of customers whose monthly income is between ₹5,000 and ₹50,000 and above.

As of December 31, 2023, the company’s average loan ticket size ranged between ₹9 lakh and ₹10 lakh, with a loan-to-value ratio of 58.3%. It also had the highest assets under management (AUM) among its peers as of the same date at ₹19,865 crore.

The company has a comprehensive pan-India network with 487 branches spread across 20 states and union territories, operating in approximately 10,926 pin codes across India.

Aadhar Housing Finance key financial details

Aadhar Housing Finance’s revenue jumped over 18% in 2022-23 to ₹2,043 crore from ₹1,728.56 crore in 2021-22. In 2023-24, for the nine months ended December 2023 (9M FY24), the company’s revenue stood at ₹1,895.17 crore.

Its profit after tax (PAT) was up over 22% in FY23 to ₹545.34 crore compared with ₹446.20 crore in FY22. For 9M FY24, PAT stood at ₹547.88, already surpassing FY23 levels.

However, the company’s total outstanding borrowing increased almost 14% to ₹12,153.45 crore in FY23 from ₹10,674.59 crore in FY22. This has further jumped to ₹13,127.59 in the first nine months of FY24.

Housing Finance: Sector outlook

The Indian housing finance market has seen robust growth in the past few years, with the future looking equally promising on the back of the government’s focus on affordable housing. India’s housing finance market is expected to witness a compounded annual growth rate (CAGR) of 13-15% between FY23 and FY26.

Incentives provided by central and state governments to the housing sector, an increased supply of affordable homes, rising demand for affordable homes in tier 2/3/4 cities, and low home loan interest rates augur well for companies operating in this space.

Since Aadhar Housing Finance is the largest player in the affordable home loan segment, it is well placed to leverage its dominance to tap the growth potential of the industry.

Aadhar Housing Finance IPO dates

If you have made up your mind on the Aadhar Housing Finance IPO, remember that the last day to bid for Aadhar Housing Finance shares is on May 10. The share allotment status should be finalised on May 13. The stock would list on both the National Stock Exchange of India (NSE) and BSE on May 15.

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