Aadhar Housing Finance IPO day 3: GMP, subscription status to review. Apply or not?

Aadhar Housing Finance IPO Day 3: The initial Public Offering (IPO) of Aadhar Housing Finance Limited hit the Indian primary market on 8th May 2024 and bidding for this public issue will end today evening. This means investors have just one day in hand to apply for the public offer. The company has fixed Aadhar Housing Finance IPO price band at ₹300 to ₹315 per equity share. The book build issue is a mix of fresh shares and OFS (Offer For Sale). The company aims to raise ₹1000 crore from fresh shares while the rest ₹2000 crore is reserved for the OFS route. Meanwhile, premium of the Aadhar Housing Finance shares have surged in the grey market after the bidding began for the book build issue. According to stock market observers, shares of the company are available at a premium of ₹70 in the grey market today. They said that rise in the Aadhar Housing Finance IPO grey market premium (GMP) can be attributed to the strong Aadhar Housing Finance IPO subscription status after two days of bidding.

Aadhar Housing Finance IPO GMP today

Market observers have noted that the Aadhar Housing Finance IPO grey market premium (GMP) today is ₹70, a significant increase from Thursday’s GMP of ₹52. This rise, despite weak trends on Dalal Street, is a testament to the positive sentiments surrounding the IPO. They anticipate a strong debut of shares on the listing date, further fueling optimism.

Aadhar Housing Finance IPO subscription status

By 10:27 AM on day 3 of bidding, the public issue was subscribed 1.68 times while the retail portion of the book build issue was booked 1.10 times. The NII portion was booked 2.49 times whereas its QIB segment got subscribed 2.05 times.

Aadhar Housing Finance IPO review

BP Equities, a leading financial institution, has given a ‘subscribe’ rating to the Aadhar Housing Finance IPO. They believe that the stock, valued at 3.1x P/BVPS on FY23 book value, is fairly priced compared to its peers. They recommend subscribing to the issue based on this valuation. This positive review adds to the overall positive sentiment around the IPO.

Advising investors to apply for the public issue, Marwadi Shares and Finance said, “Considering the Book Value of ₹52,492 mn on a post issue basis, the company is going to list at a P/B of 2.56x with a market cap of Rs. 1,34,348 mn, whereas its peers namely Aptus Value Housing Finance India Limited, Aavas Financiers Limited, Home First Finance Company India Limited, India Shelter Finance Corporation Limited are trading at a P/B of 4.65x, 3.36x, 4.05x, 4.59x. We assign “Subscribe” rating to this IPO as company has a seasoned business model with strong resilience through business cycles and robust processes for underwriting, collections and monitoring asset quality. Also, it is available at reasonable valuation as compared to its peers.”

Aditya Birla Ltd, Ashika Research, Canara Bank Securities, Nirmal Bang, and SMIFS, all reputable financial firms, have given a ‘subscribe’ tag to the book build issue. This collective endorsement should provide potential investors with a sense of confidence in the IPO’s potential.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, and not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.