Aadhar Housing Finance Limited is a housing finance company targeting the lower income segment. Aadhar Housing Finance IPO aims to raise Rs 3,000.00 crores. The issue is a combination of fresh issue of 3.17 crore shares aggregating to Rs 1,000.00 crores and offer for sale of 6.35 crore shares aggregating to Rs 2,000.00 crores.
IPO opens
May 08, 2024
IPO Closes
May 10, 2024
IPO Size (Rs.)
₹3,000.00 Cr (95,238,095 shares)
Breakup
fresh issue ₹1,000.00 Cr+ OFS₹2,000.00 Cr
Face Value:
₹ 10 per share
IPO Price in Rs :
₹300 to ₹315 per share
Minimum Lot
47 Shares
Listing At
NSE, BSE
QIB
~50%
NII Quota
~15%
Retail Quota
~35%
Lead Manager
ICICI Securities, Citigroup Global , Kotak Mahindra , Nomura, SBI Capital Markets
Registrar
Kfin
About Aadhar Housing Finance:
The Company was originally incorporated as ‘Vysya Bank Housing Finance Ltd.’ in 1990.
Name of the company was changed to ‘DHFL Vysya Housing Finance Ltd’ in 2003.
Aadhar Housing Finance Ltd’ in 2013, was merged into ‘DHFL Vysya Housing Finance Ltd’ and 2017 and the name was changed to ‘Aadhar Housing Finance Ltd’.
BCP Topco, which is an affiliate of funds managed by Blackstone, is the company’s Promoter and currently holds 98.72% stake in the company.
Aadhar Housing Finance Company is retail focused HFC concentrated on the low-income housing segment (ticket size less than ₹ 15 Lacs) in India and serving economically weaker and low-to-middle income customers.
Aadhar HFC offers various 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.
As of December 31, 2023, the company had a network of 487 branches (including 109 sales offices) in 533 districts covering 10,926 pin codes in 20 states and union territories in India.
The company also holds a certificate of registration to act as corporate agent from IRDAI. and thus it is permitted to enter into arrangements with insurers for the distribution of life, general and health insurance products.
Financials: Aadhar Housing Finance IPO
Particulars/ Rs (in crore)
2023(09)
2022(09)
2023(12)
2022(12)
2021(12)
Total income
1,895.20
1,488.20
2,043.50
1,728.60
1,575.60
Profit after tax
547.9
404.1
544.8
444.9
340.1
Equity Share capital
394.8
394.8
394.8
394.8
394.8
Net worth
4,249.10
3,555.70
3,697.60
3,146.60
2,692.80
Diluted EPS
13.5
9.9
13.4
10.9
8.4
Diluted NAV per Share
104.2
87.3
90.9
77.1
66.1
Total borrowings
13,127.60
11,715.50
12,153.50
10,674.60
10,374.50
Post issue Share Capital
426.50
FV
10.0
IPO price
315.0
EPS Fy23
12.8
PE Fy23
24.7
EPS Fy24 (annualized)
17.1
PE Fy24 (annualized)
18.4
Market cap in Lacs
13,434.8
Market cap / Sales
6.57
Price / BV
2.56
Aadhar Housing Finance IPO: Anchors
A total of 2,85,04,761 shares were allotted to a total of 61 anchor investors
The company received anchor book investments from the likes of Morgan Stanley, Stichting Depository APG, WF Asian Reconnaissance Fund, Clarus Capital, Neuberger Berman Emerging Markets Equity Fund, Theleme India Master Fund, CLSA Global, East Bridge Capital, Nepean Long Term Opportunities Fund, Amundi Funds etc.
This allocation was made to 28 mutual fund schemes belonging to 11 AMCs. The mutual fund allocation in the anchor book was 35.64%.anchor size.
Aadhar Housing Finance IPO: Salient Points
The Indian housing finance sector is witnessing a surge in activity, fueled by the government’s focus on affordable housing.
The overall size of the housing finance market focusing on low income housing loans in India was around ₹ 4.4 trillion as of December 2023, constituting for around 14% of the overall housing finance market, as per CIBIL data. CRISIL MI&A expects low income housing segment to touch ₹ 5.4-5.7 trillion by March 2026, translating into an 8-10% CAGR between Fiscals 2023 and 2026.
Aadhar Housing Finance, a prominent player in this space,
Aadhar Housing Finance, which was formerly part of Dewan Housing group, was acquired by PE investor Blackstone in 2019.
With Offer For Sale by the promoter Blackstone their 99% stake will drop to 76%.
Gross AUM over the Years((₹ in million)
Aadhar HFC had the highest AUM and Net Worth among its peers in Fiscal 2021, Fiscal 2022, Fiscal 2023 and 9 months ended December 31, 2023. The company’s Gross AUM stood at ₹ 19,865.2 Cr as of December 31, 2023, and grew at a CAGR of 17.3% between FY2021 to December 31, 2023.
For FY2023, the company had reached 233,000 accounts and had more than 255,000 Live Accounts as of December 31, 2023.
Breakdown of Gross AUM by occupation
As of March 31, 2021, March 31, 2022, March 31, 2023, December 31, 2022, and December 31, 2023, the GNPAs accounted for 1.1%, 1.5%, 1.2%, 1.8% and 1.4% respectively, of the Retail AUM, while the Net NPAs accounted for 0.7%, 1.1%, 0.8%, 1.3% and 1.0%, respectively, of the Retail AUM.
The average ticket size of the company’s loans has remained stable at ₹ 0.9 million from March 31, 2021, to March 31, 2023, and increased to ₹ 1.0 million as of December 31, 2023, with an average loan-to-value of 57.8% and 58.3%, as of March 31, 2023, and December 31, 2023, respectively.
From the net IPO proceeds:
To meet future capital requirements towards onward lending (Rs. 750 Crore); and
General corporate purposes.
Peers
Parameter / Company
Aadhar Housing Finance
Aptus Value Hou
Aavas Financiers
Home First Fin
India Shelter Fin
AUM Dec23 (₹cr)
19865
8072
16080
9014
5609
CMP (₹)
315
324
1593
892
576
Revenue(₹cr)
2043.23
1093.36
1608.76
790.99
584.53
Net Profit(₹ cr)
545
503
430
228
155
NPM %
27%
27%
27%
27%
27%
PE
24.7(18.4)
26.4
25.7
27.6
39.8
Price/BV
2.56
4.7
3.7
4.3
4.1
RONW
16.5
16.1
14.1
13.5
13.4
NPA % (fy23)
1
0.9
0.9
0.012
0.008
It looks evenly placed compared to peers.
The company’s average cost of borrowings has reduced from 8.2% as of March 31, 2021, to 7.6% as of December 31, 2023.
On the flip side the promoter being a financial investor will certainly look to exit sometime in the future.
Portion of non home loan segment has been increasing. Now stands at 22%.
They have a presence in 20 states and union territories, operate in about 10,926 pin codes across India, which is the highest among the peers as per CRISIL as of March 31, 2023.
Aadhar Housing Finance IPO is coming at a PE of 24.7x (Fy23 earnings) and 18.4x ( FY24 annualized earnings).
I am likely to apply in the Aadhar Housing Finance IPO. Its financial performance has remained consistent and resilient over the years and has backing of strong PE investor. I do not expect a very high listing for the scrip given the nature of business and present sentiments for peers.
GMP as reported on social media has been Rs. 70.
Please take a decision based on your risk appetite.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.
