Aadhar Housing Finance Gets SEBI Nod for ₹5,000 Crore IPO

8 Apr 2024 , 04:22 PM

Aadhar Housing Finance Limited, a prominent player in India’s low-income housing sector, has recently garnered final observations from SEBI for its proposed IPO, marking a significant milestone in its financial journey. The company aims to raise approximately ₹5,000 Crore through this public offering, having submitted its draft papers earlier this year in February.

This isn’t the first time Aadhar Housing has ventured into the IPO terrain. Back in January 2021, the company had initially submitted draft papers to SEBI, ultimately receiving regulatory approval in May 2022 to raise over ₹7,000 Crore. However, it decided against proceeding with the outlined plans at that time.

The current IPO blueprint comprises a new equity offering amounting to ₹1,000 Crore alongside a ₹4,000 Crore offer for sale. Within the offer for sale (OFS), the promoter BCP Topco VII Pte is set to divest its stake. BCP Topco, closely affiliated with funds managed by Blackstone, presently holds 98.7% of the pre-offer issued, subscribed, and paid-up equity share capital. Leveraging the robust resources, relationships, and expertise of Blackstone, a globally renowned investment firm, bodes well for Aadhar Housing’s future prospects.

The intended allocation of the net proceeds from the IPO is primarily geared towards meeting future capital requirements related to onward lending and fulfilling general corporate objectives.

Aadhar Housing Finance Limited specializes in catering to the housing needs of the economically weaker and low-to-middle-income segments, offering small-ticket mortgage loans. The average ticket size of their loans stood at ₹0.9 million, with loan-to-value ratios of 57.6% and 58.1% as of September 30, 2022, and September 30, 2023, respectively. The company provides a range of mortgage-related loan products, spanning residential property purchase and construction loans, home improvement and extension loans, as well as loans for commercial property construction and acquisition. With a robust presence, it operates through 471 branches and 91 sales offices across India.

Leading financial institutions such as ICICI Securities, Citigroup Global Markets, Kotak Mahindra Capital, Nomura Financial Advisory and Securities (India), and SBI Capital have been appointed as the book-running lead managers for the IPO, underscoring the confidence in Aadhar Housing’s growth potential and market position.