Aadhar Housing Finance IPO opens today: GMP, subscription status, review, other details. Apply or not?

Aadhar Housing Finance IPO has allocated retailinvestors 35% of the contented size, non-institutional investors (NIIs) 15%, and qualified organization buyers (QIBs) 50% of the contented size. The institution is offering a discount of ₹23 per stock to its employees.

Aadhar Housing Finance Limited is simply a lodging concern steadfast that was founded successful 2010 with an accent connected little income groups.

Customers successful India's tier 4 and tier 5 towns are the people marketplace for the income offices of the heavy interaction branches.

The steadfast enlisted 12,221 Aadhar Mitras arsenic of September 30, 2023, who are paid referral fees for uncovering loans for their clients.

The organisation offers a scope of owe financing options for building, renovating, and buying residential and commercialized existent estate.

The corp has an extended web of 471 branches, including 91 income offices, arsenic of September 30, 2023. These branches and income offices service astir 10,926 pin codes successful India and are dispersed implicit 20 states and national territories.

As per the Red herring prospectus (RHP), Aadhar Housing Finance's listed peers are Aptus Value Housing Finance India Ltd (with a P/E of 31.3), Aavas Financiers Ltd (with a P/E of 28.1), Home First Finance Company India Ltd (with a P/E of 34.9), and India Shelter Finance Corporation Ltd (with a P/E of 33.1).

Between March 31, 2022, and March 31, 2023, Aadhar Housing Finance Limited's nett aft taxation (PAT) climbed by 22.22% portion its gross accrued by 18.22%.

Aadhar Housing Finance IPO details

Aadhar Housing Finance's ₹3,000 crore archetypal nationalist offering consists of an OFS (offer for sale) by promoter BCP Topco VII Pte Ltd, a Blackstone Group affiliate, for ₹2,000 crore and a caller contented of equity shares valued astatine ₹1,000 crore.

Promoter BCP Topco VII Pte volition merchantability its involvement wrong the OFS. 98.7% of the pre-offer issued, subscribed, and paid-up equity stock superior is present held by BCP Topco, the promoter and an affiliate of funds managed by Blackstone.

The institution plans to usage the nett proceeds for wide firm activities and to conscionable aboriginal superior requirements for further lending.

The publication moving pb managers are SBI Capital Markets Limited, Nomura Financial Advisory and Securities (India) Pvt Ltd, Kotak Mahindra Capital Company Limited, ICICI Securities Limited, and Citigroup Global Markets India Private Limited. For this issuance, Kfin Technologies Limited is acting arsenic registrar.

Aadhar Housing Finance IPO Review 

BP Equities Pvt Ltd

The brokerage claims that the institution and absorption team's capabilities are demonstrated by the wide growth, portfolio performance, plus quality, and sustained profitability during these times. Aavas Financiers (14.1%) and Home First Finance (13.5%) were the adjacent 2 fiscal companies with the top instrumentality connected equity successful FY23, with Aadhar Housing Finance reporting the second-highest complaint astatine 15.9%. Among the peers analysed, it besides claimed the 3rd lowest unit outgo implicit the aforesaid time, astatine 2.10% successful FY23. Aadhar Housing Finance, 1 of the adjacent sets nether analysis, reported annualized output connected beforehand and instrumentality connected equity for the 9 months ending December 31, 2023, astatine 14.2% and 18.4%, respectively.

The brokerage said that arsenic clip goes on, it anticipates improved operational performance, driven mostly by the low-income lodging segment's dominance, inexpensive borrowing costs, and greater adjacent instrumentality ratios. The banal is priced astatine 3.1x P/BVPS connected FY23 publication worth astatine a higher terms scope of Rs. 315, which they judge is tenable successful examination to its rivals. As a result, the brokerage suggests giving the contented a SUBSCRIBE rating.

Swastika Investmart Ltd

The brokerage claims that determination are a fewer important obstacles that request to beryllium cautiously considered. Because of the creditworthiness of its low-income customers and the emergence of non-performing assets (NPAs), Aadhar is exposed to inherent risks. In addition, the steadfast faces volatility successful indebtedness rates and competes successful a highly competitory field.

Although Aadhar's IPO worth of 22.8x P/E and 3.36x P/BV seems reasonable, caution is indispensable owed to the company's important reliance connected borrowing. As a result, the brokerage lone advises high-risk investors looking for sustained vulnerability to the affordable lodging marketplace to see this IPO.

(more to come) 

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Published: 08 May 2024, 09:10 AM IST