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Aadhar Housing Finance, under the ownership of private equity giant Blackstone, is planning for an initial public offering (IPO) ranging from USD 600 million to USD 650 million, with an ambitious valuation of up to USD 3 billion, according to insiders familiar with the matter. In 2019, Blackstone made a strategic investment of around USD 300 million in Aadhar, aligning its interests with the surging demand for affordable housing and financing solutions in India.
This IPO endeavor marks Aadhar's second attempt at a public listing, following the abandonment of a USD 1 billion IPO plan in 2022 due to market volatility stemming from the Russia-Ukraine war. Aadhar is gearing up to submit its IPO papers to India's market regulator within the next two weeks, signaling a renewed effort to capitalize on favorable market conditions. This potential deal would exemplify the current trend of private equity investors strategically divesting segments of their holdings amidst India's flourishing stock markets- a rare bright spot on the global investment landscape.
India is currently witnessing an unprecedented surge in listing plans, buoyed by expectations of political stability and robust economic growth. The nation's stock market recently surpassed Hong Kong, securing its position as the world's fourth-largest, with the benchmark Sensex index trading near historic highs. An undisclosed source emphasized Blackstone's desire to leverage these market conditions by gradually selling a portion of its stake, underscoring the critical importance of timing in this confidential IPO plan. Aadhar has enlisted the expertise of prominent investment banks, including Citi, Nomura, and India's Kotak and ICICI, as advisors for its upcoming IPO filing.
The proposed listing in Mumbai is slated for May, according to informed sources. Blackstone, Nomura, and Citi have chosen to remain silent on the matter, refraining from offering comments. Similarly, Kotak, ICICI, and Aadhar have not responded to queries seeking comments. Aadhar Housing Finance distinguishes itself by offering housing loans up to USD 18,000 to individuals with monthly incomes as low as USD 75. This initiative addresses a pressing need in India, where escalating real estate prices pose significant challenges to home ownership, especially in major cities. The company's focus lies in catering to "economically weaker sections and low-income groups," comprising the majority of its loan portfolio.
Newer entrants backed by private equity are challenging the traditional dominance of state-owned and private banks in India's mortgage lending arena. Investors such as Warburg Pincus and Morgan Stanley have strategically positioned themselves in this sector in recent years. Aadhar asserts its management of a substantial USD 2 billion worth of loans, operating through 479 branches across 20 Indian states. The fiscal year 2022-23 witnessed impressive financial growth, with a 22% surge in net profit, reaching USD 65 million, and an 18% increase in total income, amounting to USD 245 million, as detailed in Aadhar's annual report.
In conclusion, Aadhar Housing Finance's renewed IPO pursuit highlights Blackstone's strategic acumen and commitment to navigating India's financial landscape. Successful execution would mark a major financial milestone, aligning with the trend of private equity entities leveraging India's thriving financial milieu.
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