Shares of Aadhar Housing Finance Ltd saw some buying interest from the investors after a muted listing, followed by a bout of sell-off in the early session. However, the stock failed to hold its gains for the day and traded mostly flat in its maiden trading session on Wednesday.
Aadhar Housing Finance made a flat debut on BSE, listing at a mild discount of 0.22 per cent, while the stock was listed at par on NSE on its issue price of Rs 315. However, the stock tested lows of Rs 293.35 for the day and rebounded about 17 per cent from day's low at Rs 343.20, up 9 per cent from its issue price.
Market participants are also surprised by the flat listing of the counter, but they see Aadhar Housing Finance as a long-term play considering its growth prospects, government's initiatives, sound fundamentals, reasonable valuations and penetration in the small cities and towns.
Aadhar Housing Finance listing was below street expectation given muted market conditions. Aadhar Housing Finance received a decent subscription demand mainly on the back of its high focus in the low-income housing segment which is expected to grow the fastest sub-segment within the housing finance industry, said Prashanth Tapse, Senior VP (Research), Mehta Equities.
"We believe that the affordable low-income housing segment is poised for continued growth driven government initiatives. Considering reasonable valuations, it can be a decent long-term investment for a conservative investor. We are recommending allotted investors to 'hold' for a long-term perspective," he said.
The IPO of Bengaluru-based Aadhar Housing was sold in the fixed price band of Rs 300-315 per share with a lot size of 47 shares. It was open for bidding between May 8 and May 10. The company raised Rs 3,000 crore via its primary offering, which included a fresh share sale of Rs 1,000 crore and an offer-for-sale (OFS) of up to 6,34,92,063 equity shares.
The issue saw a solid bidding and was overall subscribed 25.49 times. The quota for qualified institutional bidders (QIBs) was booked a solid 72.78 times The quota for non-institutional investors was subscribed 16.80 times. The portions reserved for retail investors and employees saw bidding for 2.46 times and 6.52 times, respectively during the three-day bidding process.
Aadhar Housing witnessed a flat listing on the stock exchanges. The stock listed on a issue price only and fell short of pre-listing expectations, which were fueled by strong investor interest and a grey market premium suggesting a 15 per cent gains. The lackluster listing raises questions about investor sentiment and future prospects, said Shivani Nyati, Head of Wealth, Swastika Investmart.
"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," she said.
Incorporated in 2010, Aadhar Housing Finance is a housing finance company targeting the lower income segment. The deep impact branches' sales offices aim to serve customers in India's tier 4 and tier 5 towns. It provides a variety of mortgage loan products for residential and commercial property purchase and construction, home improvement and extension.
ICICI Securities, Citigroup Global Markets India, Kotak Mahindra Capital, Nomura Financial Advisory and SBI Capital Markets are the book running lead managers of the Aadhar Housing Finance IPO, while Kfin Technologies is the registrar.