Why the IPO? What is the shareholding pattern post-listing and how much is Blackstone divesting and what is it that they would continue to hold?
Rishi Anand: The rationale behind the IPO is obviously every company has a milestone to be achieved, which is the listing, which we have done today. Too many butterflies, but yes, that is how it is.
In terms of shareholding pattern, the total IPO size was Rs 3,000 crore. It has been oversubscribed about 25 times. From 98.7% , Blackstone holding has dropped by 22% to about 75.8%.
You had received the SEBI clearance to raise Rs 7,300 crore in May, 2022. You did not go through it. Given that you were seeking favourable market conditions, is listing so close to the elections, a good idea?
Rishi Anand: The way we look at it, last time we had an approval from SEBI in 2022. We waited out, the markets were volatile. We were advised to wait it out that time. We waited for a year. The card lapsed. And then again, as we proceeded, we waited out for another six months and reapplied with SEBI. We got approval. I would rather say two things here. One, is election time a good time? I think it is more to do with the markets.
The timing of the election, as our bankers have suggested, does not matter too much. So, we have gone ahead with the listing. In the entire context of approval in 2022, coming back with approval in 2023, I would say it gives more trust and faith in the holding of Blackstone which holds close to about 98.7%. The private equity player is not in a hurry to exit. It is more of a positive sign rather than a delay.
When you look at it versus your peers, your AUM is already the highest among your peers. What is the outlook one could have for your company in terms of the rate at which you are aiming to grow your book and any guidance that we can see in terms of the outlook going forward?
Rishi Anand: Yes, you are right, our AUM happens to be close to about Rs 20,000 crore as of December 23 which is highest among the peer group. I would not want to give you any guidance in terms of what is going to be in the future. But I can give you data in terms of what has happened in the last couple of years. On the disbursement side, we have grown at the rate of about 25%, on AUM at about 20%, on profits close to about 30%. There is a huge demand. We are talking about a housing unit shortfall of about 10 crores, out of which 9.5 crores unit shortfall comes in the category that I operate, which is the economically weaker section and lower income group. The moment I translate this 9.5 crores unit shortfall into a housing loan requirement, it is 35 trillion Indian rupees requirement. So, on the demand side, when there is a huge demand, there is enough and more space to expand. I do not see any reason why any company should not be growing in what they have shown in the trajectory of the last two years.
What is your outlook then on NIMs as well as asset quality?
Rishi Anand: So, asset quality, yes, nine months FY23 our GNPA numbers was 1.4%, compared to December ‘22, when we were at 1.8%. There is an obvious improvement in the asset quality. Historically, in the last 14 years, we have remained in the range of close to about 1%, 1.2% and our peak NPA has been during the COVID times, which was 1.5%.
The asset quality is well within control. NIMs currently is at about 8.5-8.9%. The major contributor to NIM happens to be spreads. We are very comfortable with the current spreads that we are operating in. So, I do not see any reason why there should be a dip in the NIM.
And what about debt levels of the company? Are you comfortable with your debt levels? Will we see debt reduction down the line?
Rishi Anand: We are at a current debt of about Rs 12,500 crore against a book of about Rs 20,000 crore. We are more than comfortably placed in the current debt levels.
Affordable housing is underpenetrated. It is still a highly competitive space in India. What is your strategy to survive and thrive against your listed peers like Aavas Financiers, Home First Finance or Aptus? What is your strategy there?
Rishi Anand: You are right about overall mortgage penetration in the country. Why? Not only low-income housing, but the overall mortgage penetration in the country against GDP stands at about 12.5%, against the closest country which is China, which is at about 28%, forget the developed country at about 50-60%.
So, yes, you are right, it is under-penetrated. When it comes specifically to the low-income housing segment, there are a lot of players focused in the low-income housing segment, out of which we have listed peers as well. Where does Aadhar stand in all of this? In terms of AUM, we are the largest low-income housing finance company, at Rs 20,000 crore.
In terms of distribution, we are in 20 states and union territory, covering close to about 490 branches, spread in about 533 districts out of the 806 districts in the country. We are covering about 11,000 PIN codes out of the 18,000 PIN codes in the states we are available, spread across the length and breadth of the country.
I would say our distribution strategy, our reach to the customer is our strength and that will keep us ahead of the closest competitors, which might be in about 13 states and the way we look at it some of them are in about five or six states. So, the closest competitor is in 13 states. It is anywhere between three and five years of legroom that we have.