According to CRISIL, Aadhar Housing Finance Limited is a HFC focused on the low income housing segment (ticket size less than ?1.5 million) in India and they had the highest AUM and net worth among the analyzed peers in FY2021, FY2022, FY2023 and nine months ended December 31, 2022 and December 31, 2023. In addition, according to the peer set analyzed by CRISIL, they had the highest number of live accounts in FY2023. In addition, they have a presence in 20 states and union territories, which is the highest among the peers analyzed by CRISIL as of March 31, 2023. They are a retail-focused HFC focused on the low income housing segment, serving economically weaker and low-to-middle income customers, who require small ticket mortgage loans. The average ticket size of the loans was ?0.9 million and ?1.0 million with an average loan-to-value of 57.7% and 58.3%, as of December 31, 2022 and December 31, 2023, respectively. They offer 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 financial performance has remained consistent and resilient through various external events in the Indian economy. They have an extensive network of 487 branches including 109 sales offices, as of December 31, 2023. The branches and sales offices spread across 20states and union territories, operating in approximately 10,926 pin codes across India, as of December 31, 2023. The branch and sales office network is widely dispersed with no state accounting for more than 14.0% in terms of Gross AUM as of December 31, 2023. They believe that the diversified reach is well positioned to meet the specific needs of the target customers across geographies, in urban and semi-urban areas. Further, as a result of the geographical spread, the top five states and union territories in terms of contribution to AUM collectively accounted for 62.0% of the AUM as of March 2023, and according to CRISIL, the cumulative share of the top 5 states in terms of AUM is much lower than other players in the peer setas of March 2023. As per financial performance, Aadhar Housing Finance Limited has posted total income / net profits of Rs 1,575.55 Cr / Rs 340.13 Cr (FY21), Rs 1,728.56 Cr / Rs 444.85 Cr (FY22), Rs 2,043.52 Cr / Rs 544.76 Cr (FY23) and Rs 1,895.17 Cr / Rs 547.88 Cr (Q3 FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 11.7 and average RoNW of 14.20% for last three fiscals. Issue is priced at a P/BV of 2.93 as per NAV of 107.6 as on 31.12.23. If we attribute latest earnings of FY22, FY23, TTM and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 30.20, 24.66, 19.51 and 18.39 respectively, which looks fairly priced. As per RHP, comparision between listed peers is shown in above table. On BRLM's front, five lead managers are associated with this IPO, and have handled around 86 IPOs in last three fiscals. ICICI Securities Limited: This is 40th Main Board IPO from this BRLM. From last 10 Main Board IPOs, three opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, three are trading below issue price and remaining are trading above issue price. ( As on 02.05.2024) Citigroup Global Markets India Private Limited: This is 8th Main Board IPO from this BRLM. From last 7 Main Board IPOs, one opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 7 Main Board IPOs, one is trading below issue price and remaining are trading above issue price. ( As on 02.05.2024) Kotak Mahindra Capital Company Limited: This is 22nd Main Board IPO from this BRLM. From last 10 Main Board IPOs, all opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, all are trading below issue price and remaining are trading above issue price. ( As on 02.05.2024) Nomura Financial Advisory and Securities (India) Private Limited: This is 5th Main Board IPO from this BRLM. From last 4 Main Board IPOs, two opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 4 Main Board IPOs, all are trading above issue price. ( As on 02.05.2024) SBI Capital Markets Limited: This is 16th Main Board IPO from this BRLM. From last 10 Main Board IPOs, five opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, three are trading below issue price and remaining are trading above issue price. ( As on 02.05.2024) As per financials, Aadhar Housing Finance Limited has shown good growth, RoNW is 14.70% and P/E is respectively 30.20, 24.66, 19.51 and 18.39 as per FY22, FY23, TTM and annualised FY24 earnings. So, issue looks fairly priced compared to peers. Company is a retail-focused HFC focused on the low income housing segment, serving economically weaker and low-to-middle income customers, who require small ticket mortgage loans, which is very competitive and fragmented business segment. The growth of the sector will be good. Performance of BRLMS are average. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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