A Closer Look
Aadhar Housing Finance, a Blackstone-backed housing finance company, is set to launch its initial public offering (IPO) on May 8, 2024. The IPO, with a size of Rs 3,000 crore, will consist of a fresh issue of Rs 1,000 crore and an offer for sale (OFS) of Rs 2,000 crore.
Analysts have cautioned that the IPO is best suited for "high-risk investors" due to the company's focus on the low-income housing segment. Aadhar Housing Finance caters to economically weaker and low-to-middle-income customers, offering small ticket sized loans of less than Rs 15 lakhs.
Despite the risks, analysts at SBI Securities believe the company is well-positioned to cater to this niche segment. They cite Aadhar Housing Finance's strong origination skills, understanding of customer needs, and focus on smaller cities as key factors for future growth.
However, analysts also warn of inherent risks associated with the creditworthiness of the company's low-income clientele and the potential for an increase in non-performing assets (NPAs). Additionally, the company operates in a highly competitive industry and is susceptible to interest rate volatility.
Overall, the Aadhar Housing Finance IPO is a complex investment proposition with both potential rewards and risks. Investors should carefully consider their risk appetite and investment goals before making a decision.