Aadhar Housing Finance Limited, one of India’s prominent affordable housing finance companies, has received a significant credit rating upgrade from CARE Ratings Limited, elevating its long-term ratings from CARE AA; Stable to CARE AA+; Stable. This upgrade spans across the company’s Non-Convertible Debentures (NCDs), Subordinate Debt, and Fixed Deposit (FD) programme, collectively amounting to ₹1928.43 crore.

The update was officially communicated on 27th June 2025 at 8:28 PM and disclosed to both the BSE and NSE on 28th June 2025, in accordance with Regulation 30(6) and 51(2) read with Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Breakdown of Ratings Upgraded by CARE Ratings

CARE Ratings has provided the following revised ratings across various instruments:

The instruments span multiple series of debentures and deposits, and the upgrades are attributed to the company’s strong operational and financial performance in FY25 (audited).

CARE Ratings’ Justification for the Upgrade

According to the report from CARE Ratings, the upgrade to CARE AA+; Stable reflects:

• Sustained improvement in Aadhar Housing Finance’s profitability and loan book expansion.

• Maintenance of a strong capital adequacy ratio and asset quality.

• Continued support from the company’s robust risk management framework.

• A well-diversified funding base with consistent debt servicing.

CARE Ratings also observed that the company’s internal controls, collection efficiency, and corporate governance practices remain commendable. The rating committee’s evaluation factored in the long-term sustainability of Aadhar Housing’s operations, its affordable housing market focus, and an increasing presence across multiple states in India.

About Aadhar Housing Finance and the Rated Instruments

Aadhar Housing Finance Limited caters primarily to the low-income segment of India’s housing finance market. With operations spread across multiple states, the company has played a vital role in bridging the home ownership gap for under-served communities.

The upgrade of instruments includes:

• Three separate series of NCDs, totaling ₹1866.43 crore, backed by high asset coverage.

• Subordinate debt of ₹60 crore, reduced from an earlier limit of ₹126 crore, still considered a tier-II capital instrument under regulatory guidelines.

• A Fixed Deposit programme, now rated for ₹2 crore after being scaled down from ₹3.12 crore, aimed at retail investors.

Each of these instruments has been reviewed under CARE Ratings’ standard protocols, which include surveillance, financial audits, and risk-based evaluations.

Implications of the Rating Upgrade

The upgraded CARE AA+; Stable rating reflects enhanced investor confidence in Aadhar Housing’s creditworthiness. The stable outlook implies a low likelihood of downgrade in the near term, given the current operational and financial trajectory.

This could potentially lead to:

• Lower borrowing costs for the company on future debt issuances.

• Greater access to institutional capital at favorable terms.

• Increased market confidence from stakeholders, lenders, and depositors.

• A likely boost to brand credibility, enhancing the firm’s competitive positioning within the NBFC-HFC sector.

Regulatory Compliance and Transparency

The company has promptly disclosed the rating actions and supporting letters received from CARE Ratings to both BSE and NSE within the stipulated timeframe. This aligns with its disclosure obligations under Regulation 30 and 51 of the SEBI LODR norms.

The filings also mention that these are routine surveillance actions, and the company is expected to undergo periodic reviews, at least once a year or more frequently if warranted by market conditions.

Future Outlook and Monitoring

CARE Ratings has reserved the right to:

• Conduct further surveillance as required.

• Revise the ratings based on any material events or macroeconomic shifts.

• Publicly disseminate rating changes without prior intimation to the issuer.

Aadhar Housing Finance has acknowledged the rating update and is expected to:

• Inform CARE Ratings of future issuances, redemptions, or changes in FD mobilisation levels.

• Maintain data transparency with the agency to avoid the "Issuer Not Cooperating" classification.

• Continue maintaining its financial discipline to preserve the newly upgraded rating level.

Conclusion

The rating upgrade to CARE AA+; Stable for Aadhar Housing Finance Limited reflects the company’s robust financial foundation, strategic management, and commitment to serving India’s affordable housing finance segment. Backed by a strong regulatory framework and disciplined debt servicing, the company appears well-positioned to capitalize on India’s growing housing demand while maintaining financial prudence.

This development is a positive signal to investors, lenders, and market participants, affirming the company’s resilience and long-term growth trajectory. As India’s housing sector continues to expand, Aadhar Housing Finance is expected to play a pivotal role in inclusive home ownership, backed by a solid credit profile and strategic business model.

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