Aadhar Housing Finance IPO Subscribed 43% On Day One

Aadhar Housing Finance Ltd. launched its three-day initial public offering on Wednesday. The IPO will close on Friday.

The IPO by the housing finance company, incorporated as Vysya Bank Housing Finance Ltd. in Bengaluru in 1990, comprises fresh issue of shares worth Rs 1,000 crore and an offer for sale of Rs 2,000 crore by promoters and shareholders, according to the red herring prospectus dated April 30.

Out of the total fundraise of Rs 3,000 crore, Aadhar Housing Finance intends to use Rs 750 crore to meet future requirements towards lending and other corporate purposes.

The company's promoter, BCP Topco VII Pte. is expected to sell equity shares worth Rs 2,000 crore. The book-running lead managers of the issue are ICICI Securities Ltd., Citigroup Global Markets India Pvt.,Kotak Mahindra Capital Co., Nomura Financial Advisory and Securities (India) Pvt., and SBI Capital Markets Ltd.

Investors can bid for a minimum of 47 equity shares, and in multiples of 47 thereafter. The minimum investment threshold mandated for retail investors is Rs 14,805. Further, the company offers a discount of Rs 23 per share to its employees.

The likely date for share listing is May 15, with the allocation of shares expected to be concluded by May 13. Kfin Technologies Ltd. has been appointed as official registrar of the public offer.

The company, which commenced its operations in February 2011 as Aadhar Housing Finance, had capital adequacy ratio of 39.7% as on Dec. 31, 2023. This is well above the RBI's minimum capital requirement for housing finance companies of 15%. The company's tier-I capital stood at 38.9%.

The net worth of the company was Rs 4,249 crore at the end of December quarter. Aadhar Housing Finance focusses on low-income housing segment, wherein the ticket size is less than Rs 15 lakh, and offers mortgage-related loan products in tier-4 and tier-5 towns across the country.

The company has a network of 487 branches, including 109 sales offices across 20 states and Union territories at the end of December 2023. In FY23, Aadhar Housing Finance posted a net profit of Rs 545 crore, up 22.5% from a year ago.

• Issue opens: May 8.

• Issue closes: May 10.

• Issue price: Rs 300–315 per share.

• Fresh issue: Rs 1,000 crore.

• Offer for sale: Rs 2,000 crore.

• Total issue size: Rs 3,000 crore.

• Listing: BSE and NSE.

• Lot size: 47 shares.

The IPO has been subscribed 0.43 times or 43% as of 5:00 p.m. on Wednesday.

• Institutional investors: 0.33 times

• Non-institutional investors: 0.60 times or 60%

• Retail investors: 0.41 times or 41%

• Employee Reserved: 2.01 times.