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Shares of Aadhar Housing Finance will make their debut on the bourses on Wednesday. The company has fixed the IPO price at ₹315, at the upper end of the price range of ₹300-315.
The initial public offer of Aadhar Housing Finance, which is backed by private equity major Blackstone, was subscribed 25.49 times, thanks mainly to QIBs.
The ₹3,000-crore IPO was a combination of a fresh issue worth ₹1,000 crore and an OFS (Offer for Sale) of ₹2,000 crore by promoter BCP Topco VII Pte Ltd, an affiliate of Blackstone Group Inc.
The public issue received bids for 178.65 crore shares, against 7 crore shares on offer.
The quota for Qualified Institutional Buyers (QIBs) was subscribed 72.78 times, while that for non-institutional investors was subscribed 16.50 times, and the portion for retail investors 2.46 times.
Prashanth Tapse, Senior VP (Research), Mehta Equities, said despite stiff competition in the low-income housing segment, Aadhar Housing Finance received decent subscription demand, mainly on the back of its high focus in the low-income housing segment, which is expected to be the fastest growing sub-segment within the housing finance industry.
“Considering reasonable valuations, we expect a decent 10-15 per cent listing gain against the issue price of ₹315.”
A decent listing is justified as Aadhar Housing Finance has maintained reasonable asset quality and healthy return ratios. “We believe that the affordable low-income housing segment is poised for continued growth, driven by government initiatives such as housing for all and infrastructure status for affordable housing. While looking at the financials, the ask valuations were reasonably priced when compared to its industry peers.”
Besides, Aadhar’s growing gross AUM and net worth, coupled with a stable average ticket size of loans, indicates sound financial health and potential for further expansion, he said. Additionally, its penetration into tier-4 and tier-5 towns suggests promising growth prospects in the longer term.
The company plans to utilise ₹750 crore of the fresh issue proceeds to meet the future capital requirements towards onward lending, while a portion will be used for general corporate purposes.
As part of the IPO process, Aadhar Housing Finance Ltd has mobilised ₹898 crore from anchor investors. The company will allot 2.85 crore shares to 61 funds at ₹315 apiece.
Morgan Stanley Asia (Singapore) Pte Ltd, Amundi Funds, Neuberger Berman Emerging Markets Equity Fund, Theleme India Master Fund, SBI Life Insurance Company, ICICI Prudential Life Insurance Company, HDFC Mutual Fund (MF), ICICI Prudential MF, Axis MF and Quant MF are among the anchor investors.
ICICI Securities, Citigroup Global Markets India Pvt Ltd, Kotak Mahindra Capital Company Ltd, Nomura Financial Advisory and Securities (India) Pvt Ltd and SBI Capital Markets are the book-running lead managers to the issue.
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