Aadhar Housing Finance, backed by private equity giant Blackstone, has set the stage for its highly anticipated initial public offering (IPO), unveiling a price band of Rs 300-315 per share. The Rs 30-billion IPO will open for public subscription from May 8 to May 10, while anchor investors can place bids on May 7.
This IPO is the third debut offering of the week, following TBO Tek and Indegene.
IPO Structure and Fund Utilization
The IPO comprises:
- A fresh issue of equity shares worth Rs 10 billion.
- An offer for sale (OFS) of shares worth Rs 20 billion by the promoter, BCP Topco VII, an affiliate of Blackstone Group Inc.
Currently, BCP Topco holds a 98.72% stake in Aadhar Housing Finance, with ICICI Bank owning the remaining 1.18%.
The company plans to use Rs 7.50 billion from the fresh issue proceeds to meet future capital requirements for onward lending, with the remainder allocated for general corporate purposes.
Expert Commentary
Amit Dixit, Head of Private Equity Asia at Blackstone, highlighted the IPO as a pivotal moment for Aadhar Housing Finance. He noted the firm transformation under Blackstone leadership, emphasizing their application of global best practices, digital innovation, and a focus on India housing sector growth.
Investor Allocation
- 50% of the issue is reserved for Qualified Institutional Buyers (QIBs).
- 35% for retail investors.
- 15% for non-institutional investors.
Business Overview
Aadhar Housing Finance specializes in providing a broad range of mortgage products, focusing on the low-income housing segment. Its offerings include:
- Loans for residential property purchase and construction.
- Home improvement and extension loans.
- Loans for commercial property construction and acquisition.
With a strong presence in the economically weaker and low-to-middle-income segments, the company caters to customers needing small-ticket mortgage loans.
As of September 30, 2023, Aadhar Housing Finance operates a robust network of 471 branches, including 91 sales offices, ensuring deep penetration across India.
Blackstone Impact
The company has significantly benefited from Blackstone resources, networks, and global expertise. Under its stewardship, Aadhar Housing Finance has undergone digital transformation across operations, from loan origination to collections.
Lead Managers
The IPO is being managed by a consortium of top-tier financial advisors, including:
- ICICI Securities
- Citigroup Global Markets India
- Kotak Mahindra Capital Company
- Nomura Financial Advisory and Securities (India)
- SBI Capital Markets
The Aadhar Housing Finance IPO represents a landmark opportunity for investors to participate in India growing housing finance sector. With its strong focus on underserved segments, a wide distribution network, and backing from Blackstone, the company is well-positioned for long-term growth.
Mark your calendars for May 8 to May 10 to grab a stake in this promising enterprise.
