Aadhar Housing Finance Raises Rs 898 Crore from Anchor Investors Before IPO

Aadhar Housing Finance Ltd, supported by the global private equity firm Blackstone, announced a significant pre-IPO achievement by securing Rs 898 crore from anchor investors. This move came just one day before its eagerly awaited initial public offering (IPO) was set to open. The company has successfully allocated 2.85 crore equity shares to an impressive roster of 61 funds at Rs 315 each, hitting the upper limit of its price band, as revealed in a document on the Bombay Stock Exchange (BSE) website.

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This strategic pricing allowed Aadhar Housing Finance to amass a total of Rs 897.98 crore. Among the anchor investors are notable names such as Morgan Stanley Asia Singapore Pte Ltd, Amundi Funds, and Neuberger Berman Emerging Markets Equity Fund, alongside major Indian financial institutions like SBI Life Insurance Company and ICICI Prudential Life Insurance Company. The IPO, priced between Rs 300 to Rs 315 per share, is open for public subscription from May 8-10.

The IPO comprises a fresh issue of equity shares amounting to Rs 1,000 crore and an offer for sale (OFS) of Rs 2,000 crore by BCP Topco VII Pte Ltd, an affiliate of Blackstone Group Inc., which currently holds a 98.72% stake in the company. Aadhar Housing Finance aims to allocate Rs 750 crore from the fresh issue proceeds towards future capital requirements for onward lending, with the remainder earmarked for general corporate purposes.

Allocations have been made with half of the issue size reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional investors. Aadhar Housing Finance is known for its focus on the low-income housing segment, offering a variety of mortgage-related loan products aimed at economically weaker and low-to-middle-income customers seeking small-ticket mortgage loans.

With a robust network of 471 branches across India as of September 30, 2023, including 91 sales offices, Aadhar Housing Finance leverages its association with Blackstone to access resources, relationships, and expertise crucial for its operations. The IPO is managed by a consortium of leading financial institutions including ICICI Securities, Citigroup Global Markets India Pvt Ltd, Kotak Mahindra Capital Company Ltd, Nomura Financial Advisory and Securities India Pvt Ltd, and SBI Capital Markets.

This IPO not only marks a significant milestone for Aadhar Housing Finance but also highlights the confidence of major institutional investors in the company's business model and growth prospects. As it prepares to expand its services and reach within the housing finance sector, particularly in the low-income segment, Aadhar Housing Finance is poised to leverage this fresh infusion of capital to strengthen its position in the market.