Aadhar Housing Finance Limited IPO: Get a download of all the important info before investing

Key highlights

Aadhar Housing Finance Limited has launched its initial public offering (IPO) on 8th May. The IPO will close on 10th May. A fresh issue of 31,746,032 equity shares at the upper price band, seeking up to ₹10,000 million is floated via the equity market. The OFS segment includes selling 63,492,063 shares with the plan to raise ₹20,000 million at the upper price band by the promoter shareholder, BCP Topco VII Pte Ltd.

IPO details:

• Dates: May 8–10, 2024, with May 8th being included as well.
• Issue Size: ₹30000 million at the upper price band price.
• Price Band: ₹300 - ₹315
• Minimum Investment: ₹14,805 (the lot size is 47 shares).
• Listing Date: May 15, 2024 (on BSE and NSE)
• Face Value: ₹10 per share

Aadhar Housing Finance Limited IPO: Strengths & Weaknesses

IPO Strengths

• Aadhar Housing Finance Limited had the highest asset under management and net worth among its analyzed peers (in FY2021, FY2022, FY2023 and nine months ended December 31, 2022 and December 31, 2023.

• It has a well established network of 487 branches (not including regional offices and corporate offices) and 109 sales offices in 20 states and union territories.

• The loan product offerings include loans for residential property purchase and construction, home improvement and extension loans, and loans for commercial property construction and acquisition.

• The company has a strong, experienced and dedicated management team, with their senior management carrying an average of 25 years' experience in the financial services industry in India.

• They have a seasoned business model with strong resilience through business cycles.

• Robust, comprehensive systems and processes for underwriting, collections and monitoring asset quality are carried out.

• Access to diversified and cost effective long term financing with a disciplined approach to asset liability and liquidity management is seen

• Social objectives are one of the core components of the company’s business model.

IPO Weaknesses

• The major types of risks that the company faces are liquidity risk, credit risk, operation risk, interest rate risk, cash management risk, collateral risk and information security risk.

Qualitative advantages

The strategic focus of Aadhar Housing Finance Limited is on the low-income housing segment along with diverse and dependable financing instruments that offer a sustainable value proposition. Its proven business model, ability to adapt with the economy, and strict approach to asset liability and liquidity management are additional strengths that secure its place in the market.

Conclusion

The IPO of Aadhar Housing Finance Limited presents an opportunity for those wanting a share in India's developmental projects in affordable housing. By virtue of the sound financial results, the scope of the industry, and compelling market position, the company presents the opportunity for growth in the long run. Nevertheless, investors should do proper due diligence to find a balance between the risks and benefits that come with investing long-term.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.

Source: RHP