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Aadhaar Housing Finance IPO- All You Need To Know

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Published Date: 07 May 2024Updated Date: 31 Dec 20246 mins readBy MOFSL

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Aadhaar Housing Finance Ltd, one amongst the esteemed housing finance companies catering to economically disadvantaged and low- to middle-income groups, is gearing up for its m launch on May 8, open for subscription until the 10th. With backing from the renowned Blackstone, the company aims to transform affordable housing finance. In this blog, we will delve into the company's business and evaluate the potential of its IPO to help you make an informed decision on whether to participate.

Opening Date	08, May 2024
Closing Date	10, May 2024
Refund Initiation	13, May 2024
Listing Date	15, May 2024
Face Value	₹10 per equity share
IPO Price Band	₹300 to ₹315 per equity share
Minimum Order Quantity	47 Shares
Issue Size	₹3,000 Cr

A Closer Look at the IPO Specifics

Aadhar Housing Finance's IPO will open on May 8th and close on May 10th, 2024. The company plans to issue fresh equity shares worth Rs. 1,000 crore and offer for sale (OFS) shares worth Rs. 2,000 crore by its promoter, BCP Topco VII Pte Ltd, an affiliate of the Blackstone Group Inc. This combined effort aims to raise a total of Rs. 3,000 crore, strengthening Aadhar Housing Finance's position in the affordable housing finance sector.

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Bidding Timelines and Allotment Intricacies

The bidding process for anchor investors will start on May 7th, allowing institutional investors to secure their stakes. The initial share sale will end on May 10th, concluding the public subscription period. Share allocation is expected to be finalized by May 13th, with refunds likely to be initiated on May 14th. Aadhar Housing Finance's shares are set to debut on the stock exchanges on May 15th, 2024.

Price Band and Investment Thresholds

Aadhar Housing Finance has set a price band of Rs. 300 to Rs. 315 per equity share for its IPO, providing investors with a strategic entry point. The minimum lot size for individual investors is 47 shares, requiring an investment of Rs. 14,805 at the upper end of the price band. This approach aims to make the IPO accessible to a wide range of investors, promoting inclusivity in the process.

Utilization of Proceeds and Strategic Objectives

According to the RHP filed by the company - the fresh issue proceeds of Rs. 750 crores will be used to meet its future capital needs for lending. A portion of the funds will also be used for general corporate purposes to strengthen operations and support sustained growth.

A Seasoned Business Model Resilient to Economic Fluctuations

Aadhar Housing Finance has shown consistent financial performance despite significant external events like demonetization and GST implementation. The company's growth, portfolio performance, asset quality, and profitability during these periods highlight the strength of its business.

Extensive Geographical Footprint and Diversified Sales Channels

As of September 30, 2023, Aadhar Housing Finance had 471 branches and 91 sales offices across 20 states and union territories in India. This extensive network, along with diverse sales channels, has supported the company's rapid expansion and solidified its position in the affordable housing finance sector.

Focusing on Target Customers and Expanding Customer Base

Aadhar Housing Finance focuses on serving economically weaker and low-to-middle-income segments, which has been key to its growth. The company is known for meeting the unique needs of these demographics and is trusted for helping people own homes. Aadhar Housing Finance aims to expand its customer base by using its extensive network and innovative solutions. Understanding the importance of technology in improving operations and customer experiences, the company has invested heavily in advanced digital and technology solutions to streamline processes and provide better service to customers, thus solidifying their operations in the industry.

Financial Performance: A Sustained Growth

As of December 31, 2023, Aadhar Housing Finance had gross assets under management (AUM) of Rs. 19,865.2 crore, a 20% increase from the previous year. The company's net profit for fiscal year 2022-23 rose by 22.5% to Rs. 544.8 crore, and its net interest income was Rs. 1,244.3 crore.

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Competitive Strengths & Potential Risks

Aadhar Housing Finance's competitive advantage lies in its strong focus on the low-income housing segment, which has positioned it as a leader in the industry. As of September 30, 2023, the company had the highest assets under management (AUM) and net worth compared to its competitors, cementing its status as an industry pioneer.

Despite its promising outlook, it's crucial to recognize and manage potential risks. Factors like interest rate volatility and the risk of asset-liability mismatches require proactive management to mitigate liquidity risks.

The IPO arrives at a pivotal moment, coinciding with ongoing elections and anticipated changes in the housing budget that could impact housing finance companies' futures. Aadhar Housing Finance and similar companies have thrived under the current government's focus on affordable housing, earning investor confidence. Whether this IPO proves lucrative or disappointing can best be determined by consulting experts. Open your Demat Account now for detailed insights.