According to the Draft Red Herring Prospectus (DRHP), the proposed IPO consists of an offer for sale (OFS) of Rs 4,000 crore by promoter BCP Topco VII Pte Ltd, an affiliate of Blackstone Group Inc., and a new issue of equity shares valued at Rs 1,000 crore.

At the moment, BCP Topco owns 98.72% of Aadhar Housing Finance.

Aadhar Housing Finance received its observation on April 5th, according to an update from the Securities and Exchange Board of India (Sebi), after submitting preliminary IPO papers to the markets regulator in February.
According to Sebi’s observation, the IPO can now be floated.

According to the draft papers, the business plans to use the Rs 750 crore in proceeds from the new issuance to cover future capital needs for further lending. Some of the funds would also be used for general corporate reasons.

Aadhar Housing Finance provides a variety of mortgage-related loan products, such as loans for the acquisition and construction of commercial real estate, home improvement and extension loans, and loans for the purchase and construction of residential real estate.

The company is a retail-focused HFC that specializes in low-income housing, catering to consumers who are low-to-middle-income and economically disadvantaged and who need small-ticket mortgage loans.

As of September 30, 2023, it has a network of 471 branches, including 91 sales offices.

The business gains from Blackstone’s assets, connections, and knowledge as one of the top investment firms globally.
In January 2021, Aadhar Housing submitted draft documents to Sebi to raise Rs 7,300 crore through the sale of initial shares.

Although it secured the regulator’s approval to go public with the issue in May 2022, it chose not to proceed with the launch.

The book-running lead managers for the issue are ICICI Securities Ltd., Citigroup Global Markets India Pvt Ltd., Kotak Mahindra Capital Company Ltd., Nomura Financial Advisory and Securities (India) Pvt Ltd., and SBI Capital Markets Ltd.

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Aadhar was purchased by private equity firm Blackstone in 2019 for roughly $300 million as a result of the group’s wager on the rising demand in India for finance and affordable housing.

The IPO is Aadhar’s second attempt at listing following the cancellation of a $1 billion plan in 2022 due to market turbulence following the conflict between Russia and Ukraine.

According to these sources, Aadhar intends to submit its IPO paperwork to India’s market regulator in the upcoming two weeks.

In the midst of record-high stock markets in India—a rare bright spot for international investors—a deal would be the most recent instance of private equity investors seeking to sell off portions of their businesses.

A rapidly expanding economy and promises of political stability are driving the nation’s record-listing intentions at the moment. Its benchmark index, the Sensex, is trading close to record highs, and its stock market recently surpassed Hong Kong’s to become the fourth largest in the world.

“Blackstone intends to sell a portion of its holding to profit from the current state of the market. Since the IPO plan is still confidential, one of the two sources, who wished to remain anonymous, stated that timing is crucial for a progressive sell-down.

As consultants for its most recent initial public offering (IPO) filing, Aadhar has enlisted investment banks Citi, Nomura, and India’s Kotak and ICICI. The sources stated that a Mumbai listing is anticipated by May.

Citi, Nomura, and Blackstone all declined to comment. Aadhar, ICICI, and Kotak did not reply to requests for comments.

Aadhar provides house loans up to $18,000 to individuals with as low as $75 monthly income in a nation where escalating real estate costs have made major city property ownership more and more challenging.

According to the company, “economically weaker sections and low-income groups” receive the majority of its loans.

Although state-owned and private banks account for the majority of mortgage loans in India, more recent private equity-owned companies are vying for market dominance. In recent years, investors like Morgan Stanley and Warburg Pincus have placed bets on the industry.

Aadhar claims to oversee $2 billion in loans across 20 Indian states and 479 offices. According to its annual report, during 2022–2023 its net profit increased by 22% to $65 million, while its total income increased by 18% to $245 million.

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