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Aadhar Housing Finance IPO: High-Risk, High-Reward Opportunity for Indian Affordable Housing Market

Aadhar Housing Finance, a leading player in India’s low-income housing segment, is looking to raise Rs 3,000 crore through its initial public offering (IPO). The IPO, open from May 8th to 10th, 2024, caters to investors with a high-risk appetite who see potential in the growing affordable housing market.

Aadhar Housing Finance IPO opens

Aadhar Housing Finance IPO opens for subscription today (Wednesday, May 8), and will end on Friday, May 10. (https://aadharhousing.com/)

Aadhar Housing Finance IPO: Key Details and Important Dates

Aadhar Housing Finance, a company focused on providing housing finance to lower-income segments in India, is entering the public market through an initial public offering (IPO). Here’s a quick breakdown of the essential details and timeline for investors to consider

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Price & Offering:

  • Price range: Rs 300 – Rs 315 per share
  • Total issue size: Rs 3,000 crore
  • Fresh issue: Rs 1,000 crore (new shares issued by the company)
  • Offer for Sale (OFS): Rs 2,000 crore (existing shareholders selling shares)

Bidding & Allotment:

  • Lot size: 47 shares (minimum bid and multiples thereof)
  • Reservation:
    • 50% for Qualified Institutional Buyers (QIBs) – typically large institutions
    • 15% for Non-Institutional Investors (NIIs) – high net-worth individuals or companies
    • 35% for Retail Investors – individual investors like you

Subscription & Listing:

  • Subscription dates: May 8th – 10th, 2024
  • Allotment finalization: Expected on May 13th, 2024
  • Listing date (tentative): May 15th, 2024 (on both BSE and NSE stock exchanges)

Additional Notes:

  • Grey market premium (GMP) as of May 7th, 2024, was Rs 70 per share. This is an unofficial indicator and doesn’t guarantee the listing price.

Remember: This information is for general knowledge only and shouldn’t be considered investment advice. Conduct your thorough research before making any decisions about the IPO.

Analysts are divided on the IPO’s suitability. Some, like BP Equities, highlight the company’s strong financials, experienced management, and focus on a high-growth sector. They point to Aadhar’s healthy return on equity and low personnel costs compared to peers. This positive outlook translates to a “subscribe” rating.

However, Swastika Investment cautions about inherent risks associated with low-income borrowers and potential rise in non-performing assets (NPAs). The competitive landscape and reliance on borrowing are also concerns. They recommend this IPO only for high-risk investors seeking long-term exposure to affordable housing.

  • Price Band: ₹300 – ₹315 per share
  • Offer Type: Fresh Issue (Rs 1,000 crore) and Offer for Sale (Rs 2,000 crore)
  • Lot Size: 47 shares and multiples thereof
  • Reservation: 50% QIB, 15% NII, 35% Retail
  • Expected Listing: May 15th, 2024 (BSE & NSE)

Subscription Status and Grey Market Premium

As of May 8th, the subscription status indicates moderate interest, with retail investors booking 41% of the allocated quota. The grey market premium (GMP) sits at ₹70 per share, hinting at a possible listing price of ₹385, a 22% premium over the issue price.

The Aadhar Housing Finance IPO offers an opportunity to invest in India’s booming affordable housing sector. However, careful consideration of the risks associated with the target clientele and the competitive environment is crucial. Investors should thoroughly analyze their risk tolerance before subscribing to the IPO.