Blackstone Inc.’s plan to raise ₹5,800 crore by paring its controlling stake in Aadhar Housing Finance is grounded with the affordable housing finance company unable to secure the market regulator’s approval for a public listing for nearly nine months.
Blackstone-backed BCP Topco holds 98.72% stake in Aadhar Housing. The US investment firm acquired the stake in June 2019 from Dewan Housing Finance Co. Ltd and the Wadhawan group for around ₹2,200 crore.
Post acquisition, Blackstone has invested ₹1,300 crore more into the company.
Typically, the Securities and Exchange Board of India (Sebi) clears draft papers for an initial public offering (IPO) in 2-3 months. According to Sebi’s website, it is awaiting response from another regulatory authority. Sebi not disclose the information it has sought from the other regulator. It also did not name the regulator.
Blackstone did not respond to email queries.
Aadhar Housing filed draft IPO papers on 24 January to raise a total of ₹7,300 crore. The company plans to issue fresh shares worth ₹1,500 crore through the IPO, while Blackstone will sell existing shares worth ₹5,800 crore, according to the draft prospectus. It did not disclose the size of stake that Blackstone plans to sell.
Aadhar Housing said it will use the proceeds from the sale of new shares to boost its Tier I capital base to meet future capital needs. As of 30 September 2020, Aadhar’s CRAR Tier I capital was 45.87%.
The lender reported a net profit of ₹340 crore in FY21, up from ₹189.38 crore in the previous year. Total income grew to ₹1,550 crore from ₹1,372 crore during the same period, according to a 6 July report by credit rating agency Care Ratings. Net NPA stood at 0.81% in FY21 against 0.78% in the previous year.
Care reaffirmed its AA credit rating on Aadhar Housing. “The ratings reflect the visible benefits post acquisition by Blackstone Group LP in the form of capital infusions, access to a wider base of banks and financial institutions with visible improvement in borrowing rates while also aiding to remove the negative market view as a result of its association with Dewan Housing Finance Limited. The ratings take into account AHFL’s sufficient capitalization and moderate gearing. The long term ratings derive strength from its solid market standing in the affordable housing finance segment and a well-diversified geographical base. Further, a favourable asset quality led by a largely salaried customer base and focus on the retail home loans sector remain positive factors underpinning the ratings. However, development of these over the near to medium term will be closely monitored,” Care Ratings said.
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