Aadhar Housing Finance IPO Listing: Shares Make Flat Market Debut, Should You Hold, Sell or Buy?

Shares of Aadhar Housing Finance Ltd, which is backed by private equity major Blackstone, made a flat market debut on Wednesday against the issue price of Rs 315. The stock listed at par with the issue price at Rs 315 on the NSE. It later hit a high of Rs 329.90 and a low of Rs 292.

On the BSE, the stock made its debut at Rs 314.30, a dip of 0.22 per cent from the issue price. The company’s market valuation stood at Rs 13,480.12 crore.

Shivani Nyati, head of wealth at Swastika Investmart, said, “Aadhar Housing Finance, a major player in the low-income housing segment, witnessed a flat listing on the stock exchanges. The company’s shares debuted at Rs 315, exactly matching its issue price. This performance fell short of pre-listing expectations, which were fueled by strong investor interest and a grey market premium (GMP) suggesting a 15-20 per cent gain. While the IPO itself was oversubscribed a significant 27 times, the lackluster listing raises questions about investor sentiment and future prospects.”

The low-income housing segment is growing, but the industry is competitive. Investors might be seeking more clarity on Aadhar’s competitive edge and long-term growth strategy, she said.

“However, the strong financials, dominant market position, and extensive branch network remain attractive attributes, and investors may expect growth in the long term,” Nyati said.

The initial public offer of Aadhar Housing Finance received 25.49 times subscription on the closing day of the share-sale on Friday. The Rs 3,000-crore initial share-sale was a combination of fresh issue of equity shares worth Rs 1,000 crore and an OFS (Offer-for-Sale) of Rs 2,000 crore by promoter BCP Topco VII Pte Ltd, an affiliate of Blackstone Group Inc.

The three-day IPO had a price range of Rs 300-315 a share. The company plans to utilise Rs 750 crore of the fresh issue proceeds to meet future capital requirements towards onward lending, while a portion will be used for general corporate purposes.

Aadhar Housing Finance offers a range of mortgage-related loan products, including loans for residential property purchase and construction; home improvement and extension loans; and loans for commercial property construction and acquisition. The housing finance company is focused on the low-income housing segment, serving economically weaker and low-to-middle-income customers, who require small-ticket mortgage loans. It has a network of 471 branches, including 91 sales offices, as of September 30, 2023.

The company benefits from the resources, relationships and expertise of Blackstone, one of the world’s leading investment firms.