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Aadhar Housing Finance IPO opens on May 8: What GMP indicates ahead of subscription
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The retail-focused housing finance company has fixed a price band of ₹300-315 per share for its initial share sale of ₹ 3,000 crore. The minimum lot size for an application is 47 shares in one lot and in multiples thereof.
Private equity major Blackstone-backed Aadhar Housing Finance’s initial public offering (IPO) is opening for public bidding on Wednesday, May 8, and will close on May 10. The anchor investor bidding will open for a day on May 7.
Ahead of the IPO opening, shares of Aadhar Housing Finance are commanding a premium of ₹66 in the grey market today.
However, it is important to note that grey market premiums are just an indicator of how the company’s shares are stacked up in the unlisted market and are subject to change rapidly.
Aadhar Housing Finance IPO price band
The retail-focused housing finance company has fixed a price band of ₹300-315 per share for its initial share sale of ₹ 3,000 crore. The minimum lot size for an application is 47 shares in one lot and in multiples thereof.
Aadhar Housing Finance has trimmed the size of its IPO to ₹3,000 crore from the originally planned ₹5,000 crore, to have a ‘solid pop on market debut and have a successful listing’, according to a Moneycontrol report.
The offer comprises a fresh issue of equity shares worth ₹1,000 crore and an offer for sale (OFS) of ₹2,000 crore by promoter BCP Topco VII Pte Ltd, an affiliate of Blackstone Group Inc. At the upper end of the price band, the valuation stands at over ₹13,000 crore.
BCP Topco currently holds a 98.72% stake in Aadhar Housing Finance while ICICI Bank owns 1.18% stake.
The company will utilise ₹750 crore of the fresh issue proceeds to meet future capital requirements towards onward lending and a portion will also be used for general corporate purposes.
Business overview
Aadhar Housing Finance 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.
The company is an HFC focused on low-income housing segment, serving economically weaker and low-to-middle-income customers, who require small-ticket mortgage loans.
It has a network of 471 branches, including 91 sales offices, as of September 30, 2023.
Financials
The housing finance company’s gross assets under management (AUM) stood at ₹19,865.2 crore at the end of December FY24, higher by 20% over the same period last year.
It has recorded healthy financial performance in the past as net profit rose by 22.5% year-on-year to ₹544.8 crore for FY23. The company’s net interest income for the year surged 28.6% to ₹1,244.3 crore as against the previous year, with net interest margin (NIM) expansion of 110 basis points at 8% during the same period.
Its net profit for the nine months ended December FY24 climbed 35.6% to ₹547.9 crore, compared to the same period last year. Net interest income rose nearly 30% during the same period to ₹1,170.4 crore, with NIM expanding 100 bps at 9%.
ICICI Securities, Citigroup Global Markets India, Kotak Mahindra Capital Company, Nomura Financial Advisory and Securities (India), and SBI Capital Markets are the book-running lead managers to the issue.
The share allotment for the Aadhar Housing Finance IPO will likely be finalised by May 13. The equity shares of the company will be listed on BSE, and NSE with a tentative listing date fixed as May 15.
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