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Aadhar Housing Finance aims for IPO by March next year: MD

Oct 11, 2023

By: BlinkX Research Team

Aadhar Housing Finance, a key player in low-income mortgages, is contemplating an initial public offering (IPO) filing with the Securities and Exchange Board of India (SEBI) by the end of March, as stated by MD & CEO Rishi Anand. In case the IPO plans face hurdles, there might be a stake sale of up to 25% by the private equity firm Blackstone, the major promoter.

Anand mentioned, “We are in discussion with promoters on the next steps. Indicatively, it looks like before March 2024, we should have some deal in place.”

Presently, Blackstone holds 98% ownership of Aadhar Housing, with the remaining 2% owned by ICICI Bank. The last IPO attempt by Aadhar Housing Finance was in May 2023, but it was postponed due to unstable market conditions. The housing finance firm manages assets valued at nearly Rs 19,000 crore as of August-end, with an expected growth to Rs 22,000 crore by the fiscal year's end.

All of the HFC’s assets are dedicated to low-income housing, with an average ticket size of Rs 950,000. The HFC currently operates with a spread of 5%-6% and doesn't plan to diversify its product lines with lower margins in the near future.

Anand projected that the total size of India's affordable housing market is about Rs 1.5 trillion and is likely to grow by 30% year-on-year in the coming fiscal years. Aadhar Housing Finance reported gross non-performing assets of 1.49% as of June-end and aims to reduce it to below 1% by the end of the current fiscal year. Additionally, the HFC plans to partner with YES Bank and Axis Bank to approve about Rs 400-450 crore of loans through co-lending partnerships in FY24.