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Aadhar Housing Finance shares see a tepid debut. Should you exit?

1 week ago 27

Contrary to the debut of TBO Tek, the listing of Aadhar Housing Finance was flat, falling short of expectations. The grey market trends signalled a gain of around 15-20% for investors.

While the IPO was oversubscribed 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. However, the strong financials, dominant market position, and extensive branch network remain attractive attributes, and investors may expect growth in the long term," said Shivani Nayti, Head of Wealth, Swastika Investmart.

The IPO, which comprised fresh equity issue worth up to Rs 1,000 crore and offer for sale (OFS) of up to Rs 2,000 crore, was booked nearly 26 times at close.

Also Read: Aadhar Housing Finance stock makes D-Street debut on flat note

The funds raised through the fresh issue would be used for general corporate purposes and to meet future capital requirements towards onward lending.

Aadhar Housing Finance is one of the largest low-income housing finance companies in India servicing the home financing needs of the low-income sections of the society. Aadhar endeavors to empower underserved millions to own their first homes.

The erstwhile Aadhar Housing Finance Limited was incorporated in 2010 and later amalgamated with DHFL Vysya with effect from 20th November, 2017 and subsequently name changed to Aadhar Housing Finance. With the merger of DHFL Vysya and Aadhar Housing Finance, Aadhar is one of the few players which has a pan-India presence.

For the period ended December 2023, the company clocked revenue from operations of Rs 658.5 crore and posted a profit after tax of Rs 203.4 crore.

ICICI Securities, Citigroup Global Markets India, Kotak Mahindra Capital, Nomura Financial Advisory and Securities (India) and SBI Capital Markets acted as the book running lead managers to the issue.

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