Aadhar operates primarily in the affordable housing finance segment, targeting home buyers in economically weaker sections (EWS) and low-income groups (LIG). This niche market, supported by government initiatives and regulatory incentives, represents the fastest-growing sub-segment within the housing finance industry.
The standouts
Key differentiators for Aadhar include its status as the largest player in the affordable housing finance space, boasting an asset under management (AUM) of Rs 19,900 crore as of December 2023.
Despite stiff competition in the affordable housing finance landscape, Aadhar has maintained reasonable asset quality and healthy return ratios. The company’s average loan ticket size stands at Rs 10 lakh, with an average loan-to-value ratio of 58%, reflecting prudent lending practices.
The rationale
Aadhar’s IPO valuation is considered attractive relative to its peers, priced at a discount compared to other listed players. At the upper price band of Rs 315 per share, Aadhar is valued at 1.9 times estimated book value for FY26 on a post-money basis.
The affordable housing segment is poised for sustained growth driven by urbanization, nuclear family trends, and government initiatives such as housing for all and infrastructure status for affordable housing. Aadhar’s loan book is anticipated to grow at over 20% per annum, leveraging on these structural drivers despite potential challenges related to delinquencies associated with high growth.
