The IPO comprises a combination of a fresh issue of shares worth Rs 1,000 crore and an offer-for-sale (OFS) of shares worth Rs 2,000 crore by promoter BCP Topco.
Aadhar Housing intends to utilize the net proceeds for meeting future capital requirements related to onward lending and general corporate purposes.
Aadhar Housing Finance IPO preview
Analysts advised investors to subscribe to the issue as the company boasts of strong financial performance reflecting consistent growth over the years.
“While the IPO valuation of 22.8x P/E and 3.36x P/BV might appear fair, Aadhar’s high reliance on borrowing necessitates a cautious approach. Therefore, we recommend this IPO only for high-risk investors seeking long-term exposure to the affordable housing sector,” said Swastika Investmart.
Aadhar Housing Finance IPO price band
The company has fixed a price band of Rs 300-315 per share, where investors can bid for 47 shares in one lot. At the upper end of the price band, the valuation exceeds Rs 13,000 crore.Also Read: Aadhar Housing Finance IPO opens Wednesday. 10 things to know before subscribing to the issue
Other details
The company is a HFC focused on the low-income housing segment, with a ticket size of less than Rs 15 lakh. It had the highest AUM and net worth among analyzed peers in the six months that ended September 2023.
The financier offers a range of mortgage-related loan products, including loans for residential property purchase and construction, home improvement and extension loans, and loans for commercial property construction and acquisition. It has an extensive network of 471 branches including 91 sales offices.
According to a peer set analyzed by Crisil, Aadhar Housing Finance had the highest number of live accounts in FY2023. The company mainly services economically weaker and low-to-middle-income customers.
The average ticket size of the loans was Rs 9 lakh with an average loan-to-value of 57.6% and 58.1%, as of September 30, 2022 and September 30, 2023, respectively.
ICICI Securities, Citigroup Global Markets, Kotak Mahindra Capital, Nomura Financial Advisory and Securities (India) and SBI Capital are the book running lead managers to the issue.