The Aadhar Housing Finance IPO has commenced, offering investors an opportunity to delve into the burgeoning housing finance sector.

Let's delve into the intricacies of this offering and discern whether it's a prudent investment choice.

Aadhar Housing Finance, backed by Blackstone, has initiated its IPO, running from May 8 to May 10, with a price band of ₹300 to ₹315 per share.

Notably, the IPO garnered ₹898 crore from anchor investors on May 7, setting the stage for robust market interest. Each bid comprises multiples of 47 shares, with a minimum bid requirement of 47 shares.

In terms of allocation, retail investors are earmarked 35% of the issue size, while non-institutional investors (NIIs) and qualified institutional buyers (QIBs) secure 15% and 50%, respectively.

The company extends a ₹23 per share discount to its employees, fostering employee engagement and participation in the offering.

Founded in 2010, Aadhar Housing Finance aims to cater to the housing needs of lower-income groups, particularly in tier 4 and tier 5 towns across India.

The firm boasts an extensive network of 471 branches and 91 sales offices, spanning over 20 states and union territories, effectively reaching approximately 10,926 pin codes.

Aadhar Housing Finance's offerings encompass a diverse array of mortgage financing options tailored for both residential and commercial real estate endeavors.

With 12,221 Aadhar Mitras enlisted as of September 30, 2023, the firm incentivizes loan referrals, augmenting its customer outreach and loan origination capabilities.

In assessing its financial performance, Aadhar Housing Finance witnessed a commendable uptick, with a 22.22% increase in profit after tax (PAT) and an 18.22% surge in revenue between March 31, 2022, and March 31, 2023.

Such growth trajectories underscore the company's resilience and market potential.

The IPO subscription status currently stands at 30%, with the employee portion oversubscribed at 1.50 times and QIBs at 32%. NIIs and retail investors follow suit, with subscription rates of 28% and 29%, respectively, showcasing substantial investor interest.

The IPO, valued at ₹3,000 crore, comprises an offer for sale (OFS) by promoter BCP Topco VII Pte Ltd, amounting to ₹2,000 crore, and a fresh issue of equity shares valued at ₹1,000 crore.

Proceeds from the IPO are earmarked for general corporate activities and bolstering future lending endeavors.

Spearheaded by esteemed book running lead managers such as SBI Capital Markets Limited, Nomura Financial Advisory and Securities (India) Pvt Ltd, and Kotak Mahindra Capital Company Limited, among others,

The Aadhar Housing Finance IPO presents an enticing investment proposition underpinned by robust fundamentals and growth prospects.

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