Aadhar Housing Finance IPO Day 2: GMP, Subscription Status, Reviews. Should you subscribe to this issue?

Aadhar Housing Finance IPO got off to a slow and steady start with only the employee portion being fully booked on the first day. The Aadhar Housing Finance IPO was 44% subscribed on the first day. The retail investor category was 41% reserved and the non-institutional investor portion was 60% subscribed. Qualified Institutional Buyer (QIB) allocation was accounted for at 33%.

The application period for the Aadhar Housing Finance IPO begins on Wednesday, May 8th and ends on Friday, May 10th. The Blackstone-backed company's initial public offering price range is set at . INR300～ INR315 yen per share. On Tuesday, May 7, Aadar Housing Finance's IPO raised Rs 100 crore. $898 million from anchor investors. The minimum bid is 47 shares, and bids may be made in multiples of 47 shares.

Also read: Aadhar Housing Finance IPO opens today: GMP, subscription status, reviews and other details. Should you apply or not?

Retail investors have been allocated 35% of the issue size of Aadar Housing Finance IPO, followed by Non-Institutional Investors (NII) with 15% and Qualified Institutional Investors (QIBs) with 50%. Employees of the company are entitled to the following discounts: INR23 pieces per share.

Arun Kejriwal, founder of Kejriwal Research and Investment Services, claims that the business was acquired from the bankrupt DHFL Group in 2016-17.

Although the organization was dealing with many challenges, the acquired company was flawless and without any problems. The company is a housing finance company that caps ticket sizes. INR$1.5 million and focuses on the low-income housing market.

Also read: Aadhar Housing Finance IPO: 0.32x subscribed on first day of issue, check subscription status, GMP and other details

Kejriwal said the company's EPS for the year ended March 2023 was INR13.8, or INR13.4 on a fully diluted basis. Diluted earnings issues fall in the 22.4 to 23.5 P/E range. The company's net asset value as of December 23rd is: INR107.6. At the high end of this range, the price to book at this NAV is 2.92.

NAV increases as follows INROn a post-issue basis, the highest price of the band is 123.07, and the ratio remains at 2.56 times the reserve price. This showed very good performance compared to peer groups. In the medium to long term, we can benefit from this situation. Arun thinks there will also be wrist pops.

Adar Housing Finance IPO Details

Adar Housing Finance INRThe 300 billion yen initial public offering comprises an OFS (offer for sale) by promoter BCP Topco VII Pte Ltd, an affiliate of Blackstone Group. INRNew issuance of shares worth $200 billion INR100 billion.

BCP Topco VII Pte, the promoter of OFS, will sell its shares. BCP Topco, the promoter and associate of Blackstone Funds, currently owns 98.7% of the issued, subscribed and paid up share capital of the Pre-Offer.

The Company intends to use the net proceeds to meet future capital requirements for further financing and for general corporate operations.

SBI Capital Markets Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited, Nomura Financial Advisory and Securities (India) Private Limited, and Citigroup Global Markets India Private Limited. Limited is the lead manager for this book. Kfin Technologies Limited acts as the registrar in this matter.

Also read: Aadhar Housing Finance IPO to open on May 8; What does GMP show before subscription?

Aadar Housing Finance IPO Review

The brokerage attributes the company's higher cost-to-earnings ratio (increase in net interest margin) to its strategic efforts to differentiate itself from competitors in the sector. Since 2021, the business has maintained consistently high asset quality. Following the transfer of 80% of DHFL's shares in 2019, the company is now managed by BCP Topco VII PTE Ltd with support from Blackrock Group. Only 0.1% of the loan accounts in the DHFL pool are on the loan books of housing finance companies. The IPO's P/B of 3.36x appears to be fairly valued, even though the company is facing up to $269 million in lawsuits that could impact its financials. Securities companies recommend subscribing to stocks in order to earn listing profits.

SMC Global

The brokerage firm stated that the company's FY24 annualized EPS pre-issue P/E ratio is valued at 17.02 times. INRConsidering the P/E ratio of 18.51 times, it is at the higher end of the price range. INR315. The post-issuance P/E ratio of the shares is valued at 18.39x based on FY24 annualized EPS of Rs.315. 17.13. Looking at the pre-issue P/B ratio of Rs, book value of Rs. At 112.27, the P/B ratio was 2.81x. Book value is Rs. Post-issuance P/Bvx 2.47x to 127.36.

Brokers claim that Aadar Housing Finance Limited has a significant lead over HFC in the low-income housing market. With 498 branches, it has a strong presence across India. The company's underwriting, recovery, and asset quality monitoring methods and procedures are strong and extensive. The company moved to a digital IT architecture to reduce expenses, analyze customer data in real-time, enhance management and underwriting capabilities, and expand its customer base and sales reach. This stock may be selected by long-term investors.

Also read: Aadhar Housing Finance IPO: Blackstone-backed IPO mobilizes INRRaised $898 million from anchor investors ahead of subscription

Aadhar Housing Finance IPO Today's GMP

Aadar Housing Finance's IPO GMP is +71. This shows that Aadhar Housing Finance stock is trading at a premium. INRAccording to investorgain.com, there are 71 companies in the gray market.

Given the upper end of the IPO price band and the current premium in the gray market, Aadhar Housing Finance stock is expected to list at: INR$386 per share, 22.54% above the IPO price. INR315.

A “gray market premium” indicates that investors are willing to pay more than the issue price.

Disclaimer: The opinions and recommendations expressed above are those of individual analysts, experts, and brokerages and not of Mint. We recommend checking with a certified professional before making any investment decisions.