Aadhar Housing Finance IPO Review - Issue Date, Price, GMP, Allotment, Lot Size, and Details

The Aadhar Housing Finance IPO, a book-built issue with a total value of Rs 3,000.00 crores, comprises a combination of a fresh issue of 3.17 crore shares, amounting to Rs 1,000.00 crores, and an offer for sale of 6.35 crore shares, totaling Rs 2,000.00 crores. Bidding for the IPO opened on May 8, 2024, and is scheduled to close on May 10, 2024.

Allotment is expected to be finalized on Monday, May 13, 2024, with listing on both the BSE and NSE tentatively set for Wednesday, May 15, 2024. The price band for the IPO is set at ₹300 to ₹315 per share, with a minimum lot size of 47 shares. Retail investors are required to invest a minimum of ₹14,805, while the minimum lot size investment for sNII is 14 lots (658 shares), amounting to ₹207,270, and for bNII, it is 68 lots (3,196 shares), totaling ₹1,006,740.

Additionally, there is a reservation of up to 239,726 shares for employees, offered at a discount of Rs 23 to the issue price.

The book running lead managers for the Aadhar Housing Finance IPO are 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, with Kfin Technologies Limited acting as the registrar for the issue.

The Offer comprises of the Fresh Issue and the Offer for Sale. An Offer for Sale of up to 63,492,063 Equity Shares of face value of ₹ 10 aggregating up to ₹20,000 million. Fresh Issue of up to 31,746,032 Equity Shares of face value of ₹ 10 aggregating up to ₹10,000 million. The funds from fresh issue will be utilized towards

  1. To meet future capital requirements towards onward lending
  2. General corporate purposes.

The company is required to maintain a minimum capital adequacy ratio, consisting of Tier I capital and Tier II capital of not less than 15% of aggregate risk weighted assets and risk adjusted value of off-balance sheet items with Tier-I capital not below 10% at any point of time.

Aadhar Housing Finance IPO Details

IPO Date May 08, 2024 to May 10, 2024
Listing Date May 15, 2024
Face Value ₹10 per share
Price ₹300 to ₹315 per share
Lot Size 47 Shares
Total Issue Size ₹3,000.00 Cr
Fresh Issue 31,746,032 shares (aggregating up to ₹1,000.00 Cr)
Offer for Sale 63,492,063 shares of ₹10 (aggregating up to ₹2,000.00 Cr)
Issue Type Book Built Issue IPO
Listing At BSE, NSE
Share holding pre issue 394,754,970
Share holding post issue 426,501,002

Aadhar Housing Finance IPO Lot Size

Application Lots Shares Amount
Retail (Min) 1 47 ₹14,805
Retail (Max) 13 611 ₹192,465
S-HNI (Min) 14 658 ₹207,270
S-HNI (Max) 67 3,149 ₹991,935
B-HNI (Min) 68 3,196 ₹1,006,740

Aadhar Housing Finance IPO Timeline (Tentative Schedule)

IPO Open Date Wednesday, May 8, 2024
IPO Close Date Friday, May 10, 2024
Basis of Allotment Monday, May 13, 2024
Initiation of Refunds Tuesday, May 14, 2024
Credit of Shares to Demat Tuesday, May 14, 2024
Listing Date Wednesday, May 15, 2024
Cut-off time for UPI mandate confirmation 5 PM on May 10, 2024

Aadhar Housing Finance IPO Reservation

Investor Category Shares Offered Reservation %
Anchor Investor Shares Offered 28,504,761 (29.92%) N/A
QIB Shares Offered 19,003,176 (19.95%) N/A
NII (HNI) Shares Offered 14,252,381 (14.96%) N/A
bNII > ₹10L 9,501,587 (9.97%) 14,440
sNII < ₹10L 4,750,794 (4.99%) 7,220
Retail Shares Offered 33,255,556 (34.91%) 707,565
Employee Shares Offered 239,726 (0.25%) N/A
Total Shares Offered 95,255,600 (100%)

Aadhar Housing Finance IPO Promoter Holding

Share Holding Pre Issue 98.72%
Share Holding Post Issue 91.37%

About Aadhar Housing Finance Limited

Aadhar Housing Finance Limited, a HFC focused on the low income housing segment (ticket size less than ₹1.5 million) in India. The company serves economically weaker and low-to-middle income customers, who require small ticket mortgage loans. The average ticket size of our loans was ₹0.9 million and ₹1.0 million.

With presence in 20 states and union territories and having an extensive network of 487 branches including 109 sales offices, as of Dec’23 the company has highest AUM and net worth.

The company secures financing from a variety of sources including term loans and cash credit/ working capital facilities, proceeds from loans assigned, proceeds from the issuance of NCDs, refinancing from the NHB and subordinated debt borrowings from banks, mutual funds, insurance companies and other domestic, development financial institutions to meet capital requirements.

As per household finance committee report issued by the RBI in 2017, the average Indian household holds 77% of its total asset in real estate which includes residential buildings, buildings used for farm and non-farm activities, constructions such as recreational facilities, and rural and urban land. Amongst the top states with high shortage of homes, some states such as Uttar Pradesh, Bihar, West Bengal, Rajasthan and Madhya Pradesh have a lower per capita income, as compared to the national average. This shows that there is significant headroom for growth in terms of increasing per capita income and reducing the housing shortage in India.

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. With outstanding loans of ₹ 1.7 trillion as of December 2023. HFCs accounted for 29% of the market.

Rise of hybrid work model and working from home led to an increase in demand for bigger residential homes. As a result, the sale in affordable housing took a beating whereas high-end and midsegment housing gained the maximum in the last couple of years. The industry is expected to see a moderate growth with a CAGR of 8-10% between Fiscals 2023 and 2026.

Risk associated to the issue:

  • Dependence on potential borrowers and third-party service providers: The company depends on the information furnished by potential borrowers, and analysis of the information by independent valuers and advocates in deciding whether to extend credit or enter into other transactions with potential borrowers.
  • Exposed to volatility in interest rates: Net interest income and profitability directly depend on the difference between the average interest rate at which the company lend and the average interest rate at which the company borrows. Any change in this will severely affect the business.
  • Comply with regulations and guidelines of NHB and RBI: Business and financial performance could be adversely affected by changes in the laws, rules, regulations or directions applicable to them or the housing finance business.
  • The company depends on third-party selling agents for referral of 66.5% of new customers for the nine months ended December 31, 2023.

Aadhar Housing Finance Limited Financial Information (Restated Consolidated)

Amount in (Rs. Crore)

Period Ended 31st Dec 23 31st Mar 23 31st Mar 22 31st Mar 21
Reserve of Surplus 3854.40 3302.90 2751.93 2298.06
Total Assets 18035.57 16617.87 14375.81 13630.33
Total Borrowings 13066.31 12084.86 10583.26 10250.72
Fixed Assets 76.09 63.03 54.28 51.86
Cash 1221.75 1918.00 1710.16 2171.28
Net Borrowing 11844.56 10166.86 8873.10 8079.44
Revenue 1895.02 2043.23 1728.27 1575.33
EBITDA 1441.01 1536.50 1341.81 1259.67
PAT 547.88 544.76 444.85 340.13
EPS 13.90 13.80 11.30 8.60

Key Performance Indicator

KPI Values
EPS Pre IPO (Rs.) 13.80
EPS Post IPO (Rs.) 17.13
P/E Pre IPO 22.83
P/E Post IPO 18.39
ROE 15.9%
ROCE -
P/BV 2.93
Debt/Equity 3.08
RoNW 14.7%

Aadhar Housing Finance Limited IPO Peer Comparison

Company Name EPS ROCE ROE P/E (x) P/Bv Debt/Equity RoNW (%)
Aadhar Housing Finance 13.8 - 15.9% 22.83 2.93 3.08 14.7%
Aptus Value Housing Finance India Ltd 12.3 14.7% 17.2% 25.7 4.21 1.38 14.7%
Aavas Financiers Ltd 62 9.91% 13.9% 25.6 3.30 3.29 9.91%
Home First Finance Company India Ltd 34.5 11.2% 15.5% 24.7 3.50 3.44 11.2%
India Shelter Finance Corporation Ltd 23.1 12.2% 14% 26 2.79 1.49 12.2%
Aadhar Housing Finance Limited Contact Details

AADHAR HOUSING FINANCE LIMITED

2nd floor, No. 3, JVT Towers, 8th ‘A’, Main Road, Sampangi Rama Nagar, Bengaluru 560 027, Karnataka, India

E-mail: complianceofficer@aadharhousing.com

Telephone: +91 22 4168 9900

Website: https://aadharhousing.com/

Aadhar Housing Finance IPO Registrar and Lead Manager(s)

KFin Technologies Limited

Selenium Tower-B, Plot 31 & 32, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500 032, Telangana, India

Tel: +91 40 6716 2222

E-mail: ahfl.ipo@kfintech.com

Website: www.kfintech.com

Aadhar Housing Finance IPO Review

Aadhar Housing Finance Ltd. (AHFL) leads in the low-income housing sector in India, boasting the highest Assets Under Management (AUM) and net worth among peers for FY2021, FY2022, FY2023, and the nine months ending December 31, 2022 and December 31, 2023. AHFL's live accounts surpassed those of its competitors in FY2023. With a presence in 20 states and union territories, AHFL outshines its peers. Priced at a P/BV of 2.93 based on a Net Asset Value (NAV) of Rs. 107.60 as of December 31, 2023, AHFL's IPO is attractively priced. Post-issue, its Price-to-Earnings (P/E) ratio stands at 18.38. With a rise in Profit After Tax (PAT) to Rs. 730 Cr. in FY24 (TTM basis) from Rs. 544 Cr. in FY23 and a 25% increase in revenue compared to FY23, AHFL shows robust growth. Operating with 498 branches nationwide, AHFL is a compelling investment opportunity for medium to long-term investors.

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