Aadhar Housing Finance Limited IPO
Aadhar Housing Finance Limited, is offering an exciting opportunity for investors through its Initial Public Offering (IPO).
The company aims to raise ₹3,000 crores through the issuance of 9.52 crore shares.
Lead Managers & Registrar:
ICICI Securities Limited, Citigroup Global Markets India Private Limited, Kotak Mahindra Capital Company Limited, Nomura Financial Advisory And Securities (India) Pvt Ltd and SBI Capital Markets Limited are the book running lead managers, while Kfin Technologies Limited is the registrar for the issue.
About the Company
Aadhar Housing Finance Limited (Aadhar) is a prominent player in India’s housing finance sector, specifically catering to the needs of low-income individuals and families. Established in 1990 and registered with the National Housing Bank (NHB), Aadhar has emerged as one of the largest companies in this segment.
Aadhar’s core mission is to empower underserved sections of society by making homeownership a reality. They achieve this by:
Offering a Range of Loan Products: Aadhar caters to a diverse clientele with monthly income ranging from ₹5,000 to ₹50,000 and above.
Financing Various Needs: They provide loans for plot purchase, construction, home improvement, extensions, and other related expenses, ensuring flexibility for borrowers.
Competitive Rates: Aadhar strives to offer competitive interest rates to make homeownership more affordable for low-income individuals.
Key Points about the IPO
| IPO Opens On | May 08, 2024 |
|---|---|
| IPO Closes On | May 10, 2024 |
| Date of Listing | May 15, 2024 |
| Price Band Per Share | ₹300 to ₹315 |
| Lot Size | 47 Shares |
| Minimum investment | ₹14,000 |
| Total Issue Size | ₹3000 Cr |
| Fresh Issue | ₹1000 Cr |
| Offer for Sale | ₹2000 Cr |
| Exchanges Listing On | BSE, NSE |
Key financials (in ₹ Cr)
| Period Ended | 31 Mar 2021 | 31 Mar 2022 | 31 Mar 2023 | 31 Dec 2023 |
| Assets | 13630.33 | 14375.81 | 16617.87 | 18035.57 |
| Revenue | 1575.55 | 1728.56 | 2043.52 | 1895.17 |
| Profit After Tax | 340.46 | 446.20 | 545.34 | 547.88 |
| Net Worth | 2692.76 | 3146.63 | 3697.6 | 4249.10 |
| Total Borrowing | 10374.47 | 10674.59 | 12153.45 | 13127.59 |
Performance Indicators
| RoNW | 12.9% |
| P/BV | 2.93 |
| ROE | 18.4% |
| Debt/Equity | 3.1 |
Key Strengths
Pan-India Presence: Through strategic mergers and acquisitions, Aadhar has established a pan-India presence with over 471 branches and offices across the nation. This extensive network allows them to reach a wider demographic and cater to the needs of diverse communities.
Strong Track Record: Aadhar boasts a successful track record, having served over 246,983 customers as of 2024. This impressive number reflects their commitment to financial inclusion and their impact on the lives of low-income families.
Understanding the Underserved: Aadhar’s team possesses a deep understanding of the unique challenges faced by low-income borrowers. They tailor their loan products and services to cater to these specific needs.
Focus on Customer Education: Aadhar prioritizes financial literacy and customer education. They provide resources and guidance to help borrowers manage their finances and make informed decisions about homeownership.
Social Impact: By promoting homeownership amongst low-income individuals, Aadhar contributes to poverty alleviation, community development, and overall societal well-being.
Key Risks
Macroeconomic Sensitivity: Aadhar’s business is highly sensitive to macroeconomic factors, particularly interest rates and real estate market fluctuations. Rising interest rates can make loan repayments more expensive for borrowers and potentially lead to defaults. A slowdown in the housing market could also decrease loan demand and impact Aadhar’s profitability.
Regulatory Environment: The housing finance sector in India is subject to various regulations by the National Housing Bank (NHB) and other government bodies. Changes in regulations or stricter compliance requirements could increase costs for Aadhar and impact their business model.
Asset Quality and Non-Performing Loans (NPLs): Aadhar focuses on the low-income segment, which statistically carries a higher risk of loan defaults. Any significant increase in NPLs could negatively impact their financial performance.
Competition: The housing finance sector in India is becoming increasingly competitive, with established players and new entrants vying for market share. Aadhar might face challenges in attracting and retaining customers, especially in a price-sensitive market.
Reliance on Government Schemes: Aadhar benefits from government-sponsored housing schemes that incentivize low-income homeownership. Dependence on such schemes makes their business vulnerable to changes in government policies or funding allocations.
