The IPO street is warming up in May with Aadhar Housing Finance, owned by an affiliate of Blackstone Group, having set the price band of its Rs 3,000-crore initial public offering at Rs 300-315 a share.
The issue will open for subscription on May 8 and close on 10th of May, with the anchor book opening on May 7. Finalisation of basis of allotment will be on May 13, initiation of refunds will be on May 14 and the firm is expected to list on stock exchanges on May 15.
Smaller in Size
Moneycontrol had earlier reported that Aadhar Housing Finance reduced the size of its IPO to Rs 3,000 crore from the originally planned Rs 5,000 crore, to have a 'solid pop on market debut and have a successful listing', quoting people familiar with the development.
The IPO is a mix of fresh issue of shares worth Rs 1,000 crore and an offer-for-sale (OFS) of Rs 2,000 crore worth of shares by promoter BCP Topco. At the upper end of the price band, the valuation stands at over Rs 13,000 crore.
About the Promoter
BCP Topco VII Pte, an affiliate of funds managed by affiliates of Blackstone Group Inc, currently holds a 98.72 percent stake in the housing finance company. It has been the promoter of the company since June 2019 and zthe rest of the shares are held by public shareholders with ICICI Bank having 1.18 percent shareholding.
Aadhar Housing Finance will utilise Rs 750 crore out of the net fresh issue proceeds for its future capital requirements to further lend, and the remaining funds will be used for general corporate purposes.
The housing finance company is required to maintain a minimum capital adequacy ratio, consisting of Tier I capital and Tier II capital of not less than 15 percent of its aggregate risk-weighted assets and risk-adjusted value of off-balance sheet items, with Tier-I capital not below 10 percent at any point of time.
As of December 2023, its CRWAR (capital risk-weighted adjusted ratio) was 39.7 percent (of which Tier–I capital was 38.9 percent), which was lower compared to 44.9 percent in December 2022.
Also Read: Why the IPO action in May is expected to remain hot
Borrower Mix
Aadhar Housing lends to low-income housing segment with small-ticket mortgage loans. The average ticket size of Aadhar's loans is Rs 10 lakh with an average loan-to-value of 58.3 percent as of December 2023. The salaried people segment contributed 57.2 percent to its AUM and the remaining 42.8 percent contribution came from the self-employed segment in 9MFY24. The ratio of these segments in FY23 was 58.6: 41.4.
Key Financials
Its gross assets under management (AUM) is Rs 19,865.2 crore at the end of December FY24 higher by 20 percent over the same period last year.
The Bengaluru-based retail-focussed housing finance company with 487 branches in 20 states across India has recorded healthy financial performance in the past as net profit grew by 22.5 percent on-year to Rs 544.8 crore for FY23. Net interest income for the year increased by 28.6 percent to Rs 1,244.3 crore compared to the previous year, with net interest margin (NIM) expansion of 110 bps at 8 percent during the same period.
Net profit for the nine-month period ended December FY24 (9MFY24) jumped 35.6 percent to Rs 547.9 crore compared to the same period previous fiscal. Net interest income rose nearly 30 percent during the same period to Rs 1,170.4 crore, with NIM expanding 100 bps at 9 percent.
Disbursements during 9MFY24 at Rs 4,904 crore grew by 24.3 percent over 9MFY23 and the same in FY23 was increased by 48 percent to Rs 5,902.6 crore compared to FY22.
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