Why Blackstone plans to launched IPO?

Blackstone plans to launched IPO

Blackstone, the world's largest asset management company, wants to launch an IPO of its portfolio housing finance company Aadhar Housing Finance this year.

For this, Aadhaar Housing Finance Company has submitted a draft Red Herring Prospectus (DRHP) to the market regulator SEBI.

3 sources related to the matter told Experts that Aadhar Housing Finance Company plans to launch an IPO of $ 1 billion, or about Rs 7300 crore.

Let us tell you that the US based private equity firm Blackstone is the owner of Aadhar Housing Finance, India's largest commercial real estate company.

Sources told that for this IPO, the company plans to issue fresh shares as well as issue equity shares through promoters and investors of the company through Offer for Sale (OFS). 

Another source related to the company said that the public market in India is currently favorable for IPO, due to which the company wants to launch its IPO this year.

First IPO of any Indian portfolio company in 5 years

If the IPO of Aadhar Housing Finance is approved by SEBI, it will be the first IPO of any Indian portfolio company in the last 5 years, backed by an American private equity firm. 

Aadhaar Housing Finance has appointed ICICI Securities, Nomura, Citi and SBI Capital Markets as their investment bankers for this IPO. At the same time, law firms Cyril Amarchand Mangaldas and Khaitan and Co have been appointed as legal advisors.

Funds will be used here

These three sources told on the condition of anonymity that the funds raised through this IPO will be used by the company to increase its capital base. 

The fund will be used to pay for the company's business growth and operating expenses, as well as debt and interest. However, Blackstone has not yet officially made a statement regarding this IPO.

Special Features of Aadhar Housing Finance

Aadhar Housing Finance Company, formerly known as DHFL Vysya Housing Finance, was established in 1990. It was started by Vysya Bank in association with other banks and financial institutions. 

Aadhaar Housing Finance is a retail-focused affordable finance company that offers mortgage loans to economically less affluent and middle class homes. 

As of September 30, 2020, the company had given 64.83% of its total assets under management (AUM) to the employed. At the same time, 35.17% loan was given to self-employed customers.

Blackstone bought from DHFL for Rs 2200 crore

In the year 2019, American asset management company Blackstone bought 98.7% of Aadhaar Housing Finance from DHFL and Wadhavan Brothers for Rs 2200 crore. 

31, as of March 2020, the company had assets totaling Rs 11,432 crore. At the same time, the company had a net profit of Rs 189 crore in 2020. 

At the same time, its net profit was Rs 162 crore in 2019. As of September 30, 2020, Aadhar Housing Finance Company has 292 branches across the country spread across 20 states and operates in 12,000 locations.