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Investors are advised to refer disclosures made at the end of the research report.
1
Aadhar Housing Finance Ltd.
Prominent affordable housing player at attractive valuations
Aadhar Housing Finance Limited (AHFL) is a leading player (with ~4% market share
in overall HFC group) in affordable housing finance space with AUM of Rs 198bn.
The company is majorly owned by BCP Topco VII Pte. ltd (Blackstone Group) and
benefits from its strong parentage and expertise and have access to funding
at competitive rates. The company mainly focuses on low income housing segment
(< Rs 1.5mn loans) serving low to mid income segment. The average ticket size of
loans are Rs 1 mn with average LTV of ~58%. Salaried segment comprises ~57% of
total AUM while self employed segment comprises of ~43% as of Dec’23. As of
Dec’23, Aadhar has presence in 20 states through a network of 487 branches and
offices. The distribution network is widely spread with no single state contributing
more than 14% AUM as of Dec’23. Top 5 states Maharashtra (14%), Uttar Pradesh
(13%), Rajasthan (13%), Gujarat (11%) and Madhya Pradesh (10%) together
constitutes >62% of AUM. NII grew at 32% CAGR over FY20‐23, led by 15% CAGR in
AUM and healthy NIMs. Aided by lower credit cost (< 50bps), earnings grew at 46%
CAGR over FY20‐23. As a result, the company made a healthy RoA / RoE of 3.6% /
16.5% in FY23 and 4.2% / 18.4% in 9MFY24. A seasoned & experienced
management team with strong corporate governance enhance confidence.
Recommend – SUBSCRIBE.
Favourable demographics + low mortgage penetration = Huge growth opportunity
India’s housing loan industry is in a sweet spot and should continue to benefit from
the country's favourable demographics. Rising urbanisation (from 17.6% in 1955 to
35.0% in FY20), b) increasing number of households (2% CAGR) due to nuclearisation
and c) higher share of earning population in India (~60% are in the age bracket of 18
to 59 years) will likely continue to drive demand for housing loans. Individual housing
loans now constitute ~16% share in the overall systemic credit (Rs 180trn), having
meaningfully improved from ~11% a decade ago. Despite healthy pace of growth,
mortgage penetration (mortgage to GDP ratio) in India remains sub optimal at ~11%,
presenting a huge growth opportunity for HFCs.
AHFCs strong business model is a cocktail of high pricing power and low credit cost
Affordable Housing Finance Companies (AHFCs) cater to a relatively riskier customer
profile which leads them to charge a premium on interest. This is why they have
higher yields compared to normal housing finance players. Despite their riskier
segment focus, AHFCs' asset quality was healthy even during the COVID period
bearing testimony to their robust underwriting practices. This explains why these
companies’ RoA profile ranges at a healthy 3%-7% (Ex CANF), which in our view
should stay largely intact over FY23-26E. As these companies scale up their
businesses, their leverage should improve and boost their RoE profiles.
Significant player in AHF segment; well placed to capture market share
Aadhar Housing Finance Limited (AHFL) is a leading player (with ~4% market share in
overall HFC group) in affordable housing finance space with AUM of Rs198bn. It has
diversified presence with 487 branches spread across 533 districts in 20 states. The
branches are evenly spread across states which reduces geographic concentration
risk as no single state contributes >14% of AUM. Loan growth and subsequently
improvement in market share to be aided by a) rising urbanization and continued
expansion of its physical and digital presence across India b) increasing
customer base.
Systematix
Institutional Equities
07 May 2024
IPO Note
Sector: NBFC
SUBSCRIBE
8
th
May 2024
10
th
May 2024
Rs 300 - 315
394mn
426mn
31mn
63mn
Rs 30bn
Rs 134bn
Financial Snapshot (Rs mn)
Y/E March
FY21
FY22
FY23
FY24P
NII
6,110
7,771
9,771
12,768
PPP
4,875
6,161
7,700
10,148
PAT
3,401
4,449
5,948
7,839
EPS (Rs)
8.0
10.4
13.4
17.8
EPS Gr. (%)
79.6
30.8
33.7
31.8
BV/Sh (Rs)
63
74
87
103
Ratios
NIM (%)
4.9
5.5
6.1
6.7
C/I ratio (%)
35.8
36.3
38.1
36.4
RoA (%)
2.6
3.2
3.7
4.3
RoE (%)
13.5
15.2
16.6
18.7
Payout (%)
0.0
0.0
0.0
0.0
Valuations
P/E (x)
39.5
30.2
23.6
17.7
P/BV (x) *
5.0
4.3
3.6
3.1
Note: FY24P based on 9MFY24; *P/BV at ~2.5x (post capital raise)
Shareholding pattern (%)
Pre-Issue
Post-Issue
BCP Topco VII Pte. Ltd.
98.7
76.7
ICICI Bank
1.3
1.3
Public
0.0
22.0
Total
100.0
100.0
Pradeep Agrawal
pradeepagrawal@systematixgroup.in
+91 22 6704 8024
Pravin Mule
pravinmule@systematixgroup.in
Ronak Dhruv
ronakdhr[email protected]n
dddddd
07 May 2024
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Aadhar Housing Finance Ltd.
Strong promoter, experienced & seasoned management team enhance confidence
The company is backed by Blackstone Group (global investment firm) through BCP
Topco VII Pte. Ltd and will continue to hold ~77% stake post offer. Hence, benefits
from blackstone’s resources, relationships and expertise. The company also has a
strong, experienced and dedicated management team, having an average experience
of more than two decades in the financial services industry.
Valuation: Affordable Housing Finance Players have managed to maintain/ improve
their return profiles through higher yields, lower cost of funds and well managed
asset quality. Continued branch expansion in existing and newer geographies
coupled with government focus would continue to support their growth. Aadhar
Housing Finance (AHFL) is a bet on low ticket size affordable housing segment. Given
the current size of AHFL, the company is well positioned to capture the huge
untapped opportunity in <Rs1.5mn ticket size segment, via deeper penetration in
new geographies. In addition, experienced management team with strong track
record along with backing of Blackstone boost confidence. At the upper end of the
price band (Rs 300-315), the issue is valued at ~2.5x Dec’23 BV (including capital
raise) with RoA of ~4% and RoE of ~18%, which looks attractive. Hence, we
recommend investors to subscribe this issue.
07 May 2024
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Aadhar Housing Finance Ltd.
Snapshot of key players in the affordable housing segment
Exhibit 1: Business profile
Particulars (FY23)
AADHAR
APTUS
HFFC
AAVAS
India Shelter Finance
FY23
9MFY24
FY23
FY24
FY23
9MFY24
FY23
FY24
FY23
9MFY24
AUM (Rs mn)
172,230
198,650
67,380
87,220
71,980
90,137
141,667
173,126
43,594
56,090
1-year growth (%)
16.5
19.9
30.1
29.4
33.8
33.5
24.8
22.2
41.8
41.9
3-year CAGR (%)
14.6
-
28.4
29.0
25.8
-
22.0
22.3
42.1
-
5-year CAGR (%)
16.7
-
36.7
31.2
39.6
-
28.3
23.8
40.3
-
AUM mix - by
product (%)
Housing loan
78
76
58
60
87
86
70
69
57
58
Non - housing loan
22
24
42
40
13
14
30
31
43
42
AUM mix - by
customer (%)
Salaried and
professionals
59
57
29
26
70
68
40
40
30
29
Self-employed
41
43
71
74
30
32
60
60
70
71
AUM mix - on book/
off book (%)
On book
100
100
100
100
85
-
100
100
100
100
Off book
0
0
0
0
15
-
0
0
0
0
Network details
Branch (Nos.)
479
487
231
262
111
123
346
367
183
215
Employee (Nos.)
3,663
3,885
2,405
2,918
993
1236
6,034
-
2,709
3,319
Customers (Nos.)
172,228
198,625
107,000
133,499
77,512
90,851
187,149
-
58,552
-
No. of States
20
20
5
6
13
13
12
13
Key States as %
of AUM
Uttar Pradesh –
14%
Uttar Pradesh –
14%
Tamil Nadu –
43%
Tamil Nadu –
37%
Gujarat –
33%
Gujarat –
33%
Rajasthan –
30-35%
Rajasthan,
Maharashtra,
Gujarat & Delhi
contribute
~80-82%
Rajasthan –
31%
Rajasthan –
31%
Maharashatra –
14%
Maharashatra –
14%
Andhra Pradesh –
35%
Andhra Pradesh –
40%
Maharashtra –
14%
Maharashtra –
13%
Maharashtra –
~15%
Maharashtra –
18%
Maharashtra –
17%
Gujarat –
11%
Gujarat –
11%
Tamil Nadu –
14%
Tamil Nadu –
14%
Madhya Pradesh
– ~15%
Madhya Pradesh
– 15%
Madhya Pradesh
– 13%
Madhya Pradesh
– 10%
Madhya Pradesh
– 10%
Telangana –
9%
Telangana –
9%
Gujarat –
~15%
Product details
ATS (Rsmn)
0.9
1
0.8
1
1
1.14
0.8
1.02
1.1
1
Portfolio yield (%)
12.8
14
17
17.3
13.1
13.5
13.1
13.1
14.9
14.8
Company details
Year of incorporation
2010 *
2009
2010
2011
1998
Year of listing
-
2021
2021
2018
2023
Promoter stake
Total Stake:
100%
Total Stake:
100%
Total stake:
62.2%
Total stake:
61.1%
Total stake:
30.2%
Total stake:
23.6%
Total stake:
39.1
Total stake:
~27
-
Total stake:
48.3
BCP Topco VII
Pte.Ltd
(an affiliate of
Blackstone) –
98.7%
BCP Topco VII
Pte.Ltd
(an affiliate of
Blackstone) –
98.7%
Munuswamy
Anandan –
19.3%
Munuswamy
Anandan –
19.3%
True north
fund VLLP –
18.2%
True north
fund VLLP –
14.2%
Kedaara
capital –
23.0%
Kedaara
capital –
16.0%
-
Anil Mehta –
1.5%
ICICI Bank –
1.3%
ICICI Bank –
1.3%
Padma
Anandan –
4.5%
Padma
Anandan –
3.2%
Aether
(Mauritius)
Limited –
12.0%
Aether
(Mauritius)
Limited –
9.4%
Partner group –
16.1%
Partner group –
10.9%
-
West Bridge –
20.1%
Westbridge
crossover fund
LLC – 34.5%
Westbridge
crossover fund
LLC – 34.5%
Aravali
Investment
Holding –
26.6%
JIH LLC – 2.2%
JIH LLC – 2.0%
Auditor
Walker Chandiok & Co LLP
T R Chadha & Co LLP
Deloitte Haskins & Sells
Walker Chandiok & Co LLP
T R Chadha & Co LLP
Credit Rating
CARE:
AA/Stable
CARE:
AA/Stable
ICRA:
AA-/Stable
ICRA:
AA/Stable
IND RA:
AA-/Stable
IND RA:
AA-/Stable
ICRA:
AA/Stable
ICRA:
AA/Stable
CARE: A+
CARE: A+
ICRA:
AA/Stable
ICRA:
AA/Stable
CARE:
AA-/Stable
CARE:
AA-/Stable
CARE:
AA-/Stable
CARE:
AA-/Stable
CARE:
AA/Stable
CARE:
AA/Stable
ICRA: A+
ICRA: A+
BRICKWORKS:
AA/Stable
ICRA:
AA-/Stable
ICRA:
AA-/Stable
Source: Company, Systematix Institutional Research, Note: Aadhar Housing Finance Private Ltd was incorporated in 2010
07 May 2024
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Aadhar Housing Finance Ltd.
Company Background
• Aadhar Housing Finance Private Limited was incorporated in 2010 and later
amalgamated with DHFL Vysya in 2017 and subsequently its name changed to
Aadhar Housing Finance Limited (AHFL). In June 2019, BCP Topco VII Pte. ltd
(which is controlled by a private equity fund managed by Blackstone Group)
acquired majority stake by infusing Rs ~13bn and currently holds 98.7% in AHFL.
• Aadhar Housing Finance Ltd (Aadhar) is the largest (in terms of AUM & Networth)
affordable housing finance player focused on low ticket size loans (Rs < 1.5mn)
primarily housing loans and LAP. Aadhar offer loans for residential property
purchase and construction; home improvement & extension loans; and loans for
commercial property construction & acquisition.
• Aadhar has ~4% market share in overall HFC group with AUM of Rs 198bn as of
Dec’23. The company mainly focuses on low income housing segment serving low
to mid income segment. The average ticket size of loans are Rs 1 mn with average
LTV of ~58% (as of Dec’23). Salaried segment comprises ~57% of total AUM while
self employed segment comprises of ~43% as of Dec’23.
• As of Dec’23, Aadhar has presence in 20 states through a network of 487
branches and offices. The distribution network is widely spread and no single
state contributes more than 14% AUM as of Dec’23. Top 5 states Maharashtra
(14%), Uttar Pradesh (13%), Rajasthan (13%), Gujarat (11%) and Madhya Pradesh
(10%) together constitutes >62% of AUM.
Exhibit 2: Key Milestones of Aadhar Housing Finance
Year
Particulars
FY11
Incorporation of Pre-merger AHFPL
FY12
Pre-merger AHFPL Crossed 1,000 home loan disbursements
FY14
AUM of pre-merger AHFPL crossed Rs 5bn
FY15
AUM of pre-merger AHFPL reached Rs 10bn
FY17
Pre-merger AHFPL opened 100th branch customer base reached 49,000
FY18
Merger of DHFL Vysya Housing Finance Ltd with Pre-merger AHFPL
FY19
AUM crossed Rs 100 bn raised Rs 7 bn through a maiden public offering of NCDs
FY20
Customer base crossed 1,50,000; acquired by the Blackstone Group in June 2019
FY22
Customer base crossed 2,00,000; reached Rs 148bn AUM
Dec-23
AUM Reached Rs 199bn AUM
Source: RHP, Company, Systematix Institutional Research
07 May 2024
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Aadhar Housing Finance Ltd.
Exhibit 3: Key financial parameters
Particulars
FY21
FY22
FY23
9MFY23
Live Accounts (including assigned and co-lent loans) (nos)
182,471
204,135
233,228
255,683
Number of branches and sales offices (nos)
310
332
469
487
Average ticket size (Rs mn)
0.9
0.9
0.9
1.0
AUM (Rs mn)
133,270
147,780
172,230
198,650
- Retail AUM (Rs mn)
133,252
147,767
172,230
1,98,650
- Retail AUM as % of total AUM (%)
85
82
78
76
Gross Retail NPA (%)
1.1%
1.5%
1.2%
1.4%
Net Retail NPA to Retail AUM (%)
0.7%
1.1%
0.8%
1.0%
Net Worth (Rs mn)
26,928
31,466
36,976
42,491
Profit after tax before exceptional item (Rs mn)
3,401
4,449
5,643
5,479
Profit after tax (Rs mn)
3,401
4,449
5,448
5,479
Return before exceptional item on Average Total Assets (%)
2.6%
3.2%
3.5%
4.2%
Return before exceptional item on Equity (%)
13.5%
15.2%
16.5%
18.4%
Debt to Total Equity ratio (x)
3.9
3.4
3.3
3.1
CRAR (%)
44.1%
45.4%
42.7%
39.7%
Average yield on Gross Loan Book (%)
13.2%
12.8%
12.8%
14.0%
Average cost of Borrowing (%)
8.2%
7.2%
7.0%
7.6%
Net Interest Margin (%)
5.8%
6.9%
8.0%
9.0%
Cost to Income Ratio (%)
35.8%
36.3%
38.1%
36.2%
Source: RHP, Company, Systematix Institutional Research
Exhibit 4: Key Management
Name
Designation
Profile
Mr Deo Shankar
Tripathi
Executive Vice
Chairman
• Bachelor’s and master’s degree in Science and cleared the examination for a diploma in Public Administration.
• He has been associated with the company since January 17, 2015 and prior to joining Aadhar he was associated with pre-
merger Aadhar Housing Finance Private Ltd. (AHFPL)
• Earlier he held the position of MD & CEO Aadhar Housing Finance Ltd.
Mr Rishi Anand
MD & CEO
• Post Graduate Certification in Business Management
• He has over 25 years of work experience in financial services. Earlier he was associated with Aadhar as COO.
• Prior to joining Aadhar, he has worked with ICICI Bank , GE Countrywide Consumer Financial Services Ltd, BHW Birla Home
Finance Ltd, Reliance Capital & AIG Home Finance India Ltd.
Mr Rajesh
Viswanathan
Chief Financial
Officer
• Bachelor’s degree in commerce and he is a qualified chartered accountant cost and works accountant.
• He has several years of experience in accounting, finance, strategy, planning, taxation, treasury, audit, and managing
investor relations.
• Prior to joining Aadhar, he was associated with A F Ferguson & Co, Mahindra & Mahindra Limited, DSP Financial
Consultants Limited, KPMG Bahrain, Bajaj Allianz Life Insurance Corporation Limited, Bajaj Finance Limited & Capital Float.
Mr Sreekanth V N
Chief Compliance
Officer
• Bachelor’s degree in commerce and law. He is a qualified CS and has several years of experience in handling secretarial
functions.
• Before Aadhar he was associated with ICICI Bank, Firestone International Private Ltd. He has also worked for Bureau of
Police Research & Development, Ministry of Home Affairs and Department of Supply, Ministry of Commerce
Mr Anmol Gupta
Chief Treasury
Officer
• Bachelor’s degree in commerce (Hons.) and is a qualified chartered accountant.
• Prior to Aadhar he worked with BHW Birla Home Finance Limited and as the Accounts Officer.
Mr Nirav Shah
Chief Risk
Officer
• Bachelor’s degree in commerce and qualified Chartered Accountant. He has cleared the exam of Certified Information
Systems Audit.
• He has worked with Deloitte Haskins & Sells, ICICI Prudential Life Insurance Company Limited and Tata Capital Housing
Finance Limited.
Mr Hayyaksha
Ghosh
Chief Data
Officer
• Master’s of science degree in physics and post graduate diploma in management
• He has earlier worked with various organizations like Infosys Technologies Ltd, Mindwave Solutions Pte. Limited
(Singapore) etc.
Mr Anil Nair
Chief Business
Officer
• Master’s degree in commerce and business administration
• He has previously worked with Bata India Ltd, MIRC Electronics Ltd, ICICI Bank , DHFL, Aspire Home Finance.
Source: RHP, Company, Systematix Institutional Research
07 May 2024
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Aadhar Housing Finance Ltd.
Offer details
• The issue: Fresh issue of 31.7mn shares (Rs 10bn) and Offer for Sale of 63.5 mn
shares (Rs 20bn).
• Primary objective: Augmenting equity capital base to meet future capital
requirements towards onward lending and general corporate purpose.
Exhibit 5: Shareholding pattern
Shareholding
Pre Issue
Post Issue
BCP Topco VII Pte. Ltd.
98.7
76.7
ICICI Bank
1.3
1.3
Public
0
22.0
Total
100.0%
100.0%
Source: RHP, Company, Systematix Institutional Research
07 May 2024
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Aadhar Housing Finance Ltd.
Industry overview
Housing scenario in India
Housing Finance segment to clock 13-15% CAGR over FY23 to FY26
The Indian housing finance market grew at a healthy ~14% CAGR over FY18-FY23 led
by rise in disposable income, healthy demand coming from smaller cities markets,
attractive interest rates and government impetus on housing. Despite a healthy pace
of growth, mortgage penetration (mortgage to GDP ratio) in India still remains sub
optimal at ~11%, presenting a huge growth opportunity for bank and HFCs. Schedule
commercial banks (SCBs) command the highest market share in the housing loan
market at ~68%, followed by HFCs at 31%, and NBFCs having miniscule 1% share. As
per CRISIL, Housing Finance segment to clock 13-15% CAGR over FY23 to FY26.
Exhibit 6: Size of India’s housing loan industry Exhibit 7: Housing Finance market of loans upto Rs 1.5mn
15
18
19
21
25
29
32
44
0
13
25
38
50
FY18 FY19 FY20 FY21 FY22 FY23 9MFY24 FY26P
(Rs trn)
Housing Loans outstanding
3.7
3.9 3.9
4.1 4.1
4.3
4.4
5.7
0
2
3
5
6
FY18 FY19 FY20 FY21 FY22 FY23 9MFY24 FY26P
(Rs trn)
Low Income Housing Loans
Source: RHP, Company, Systematix Institutional Research Source: RHP, Company, Systematix Institutional Research
Growth in low income housing segment to bounce back in long run
During FY18-FY23, the growth in the low income housing segment was subdued at
~3% (CAGR), compared with overall housing loans, which has grown by 14%. This was
primarily due to slowdown in economic activity, funding challenges due to NBFC
crisis and the pandemic. Further, the increasing hybrid work model and working from
home led to an increase in demand for bigger residential homes (large ticket size).
Hence, sale in affordable housing segment was subdued while high-end and mid-
segment housing gained the maximum in past couple of years. As per CRISIL, the
growth in low income segment to bounce back strongly going ahead driven by 1)
Economic recovery post pandemic and return to office initiated by employers 2)
Government focus on housing and incentives 3) Rising demand for affordable homes
as consumers increasingly work out of Tier 3/4 cities. Further, this segment is
expected to pick up gradually and reach Rs 5.4-5.7 trn by FY26 resulting in 8-10%
CAGR during FY23-FY26 (As per CRISIL).
High regional concentration with greater skewness at the state level
Geographically, housing loan market is relatively skewed towards South and Western
region with share of 35% and 31% respectively. North region has ~26% share while
Eastern region accounts for balance 6% share in outstanding housing loans. Based on
home loans outstanding in the low income housing segment, top 10 states account
for ~80% of the market size as of Dec’23. Maharashtra tops the list with the highest
share of 16%, followed by Gujarat (12%), Tamil Nadu (9%), Rajasthan (7%) and
Madhya Pradesh (7%).
07 May 2024
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Aadhar Housing Finance Ltd.
Exhibit 8: Region-wise AUM breakup Exhibit 9: Share of top 10 states in housing loans
26%
31%
35%
6%
1%
1%
North
West
South
East
North-East
HLs not allotted to any
State
0%
25%
50%
75%
100%
FY18 FY19 FY20 FY21 FY22 FY23 9MFY24
Maharashtra Gujarat Tamil Nadu Rajasthan
Madhya Pradesh Uttar Pradesh Kerala Karnataka
Andhra Pradesh West Bengal Others
Source: RHP, Company, NHB, Systematix Institutional Research Source: RHP, Company, Systematix Institutional Research
Exhibit 10: Low income housing segment typically comprise of underserved customers
Source: RHP, Company, Systematix Institutional Research
Exhibit 11: Large HFCs continue to have dominant share, however mini HFCs have increased their market share
Market share
of HFC groups
Disbursement Mix
AUM Mix
FY19
FY20
FY21
FY22
FY23
9MFY24
FY19
FY20
FY21
FY22
FY23
9MFY24
Large HFCs
66%
62%
67%
65%
55%
66%
66%
69%
68%
70%
65% *
63%
Medium HFCs
12%
16%
12%
16%
20%
12%
15%
12%
12%
10%
14% *
15%
Small HFCs
15%
15%
13%
10%
12%
15%
15%
14%
15%
14%
14%
13%
Mini HFCs
7%
7%
8%
8%
14%
7%
5%
5%
6%
6%
8%
9%
Total
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Source: RHP, Company, Systematix Institutional Research; Note: Large HFCs - Avg AUM for FY22 and FY23 more than Rs 500 bn (LICHF, PNBHF, Indiabulls Housing, Bajaj
Housing, Piramal Capital etc), Medium HFCs - Avg AUM for FY22 and FY23 between Rs 175 bn and Rs 500 bn (CANF, ICICI Homes, IIFL Housing, TATA Capital Housing etc),
Small HFCs - Avg AUM for FY22 and FY23 between Rs 70 bn and Rs 175 bn (Aadhar, Aavas, Repco, Aditya Birla Housing, Sundaram Housing etc) Mini HFCs - Avg AUM for FY22
and FY23 less than Rs 70 bn (Aptus, Capri Global Housing, India Shelter, HFFC etc); Note: * the significant change in market share of large HFCs and Medium HFCs in FY23 was
due to merger of HDFC Ltd into HDFC bank.
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The HFC focused on low income housing segment consists primarily of small and mini
HFCs. They were able to increase their market share from 14.9% as of March 2018 to
19.5% as of December 2023 in terms of home loan outstanding. The defining
characteristic of these HFCs is their strong focus on their target segment (i.e.,
housing loans lower than Rs 1.5 million ticket size to low-income customers), deep
understanding of the micro- markets they operate in, and relatively lower focus on
other products such as loans against property (LAP) and developer loans. Their credit
assessment processes are finetuned to serve their target segment. According to
CRISIL MI&A estimates, direct sales teams as a sourcing channel account for 65-70%
of the loans of these HFCs. Aadhar has a diversified origination mix with DSTs,
Aadhar Mitra (12,451) and DSAs (5,152), contributing 33.5%, 20.8%, 45.7% to
disbursements in 9MFY24. Aadhar Mitras are individuals engaged by the company
who are in non-allied industries (hardware stores, for example) and act as lead
providers to its DSTs.
Exhibit 12: Market share of HFC focused on low income segment is at ~20%
14.9
17.1
18.9
19.7
19.2
20.0
19.5
0
5
10
15
20
25
FY18 FY19 FY20 FY21 FY22 FY23 9MFY24
(%)
Source: RHP, Systematix Institutional Research
State wise market share in low income segment
States like Gujarat, Rajasthan, Tamil Nadu, Maharashtra & chattisgarh have more
than 50% market share within their respective states in low income housing
segment. Gujarat is at the top with 62% market share followed by Rajasthan (56%)
and Chhattisgarh (54%) for 9MFY24.
Exhibit 13: State wise market share in low income segment
51%
56%
53%
62%
42%
35%
47%
39%
38%
40%
54%
31%
20%
35%
28%
0%
18%
35%
53%
70%
Maharashtra
Rajasthan
Tamil Nadu
Gujarat
Madhya Pradesh
Uttar Pradesh
Andhra Pradesh
Karnataka
Telangana
Delhi
Chattisgarh
Haryana
Punjab
Kerala
Uttarakhand
Source: RHP, Company, Systematix Institutional Research
07 May 2024
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Investment Rationale
Well placed to capture growth led by deeper penetration in key states
and expanding customer base
Aadhar Housing Finance Limited (AHFL) is a leading player (with ~4% market share in
overall HFC group) in affordable housing finance space with AUM of Rs198bn. It has
diversified presence with 487 branches spread across 533 districts in 20 states. The
branches are evenly spread across states which reduces geographic concentration
risk as no single state contributes >14% of AUM. Loan growth and subsequently
improvement in market share to be aided by a) rising urbanization and continued
expansion of its physical and digital presence across India b) increasing customer
base.There is an immense potential in the housing market, driven by significant
shortage of housing loans. As per CRISIL, ~95% of housing shortage expected to be
driven by EWS / LIG segments.
Aadhar is primarily focused on the low income housing segment (ticket size less than
Rs 1.5mn), and target first-time home buyers in economically weaker and low-to-
middle income segments. The salaried segment constitute 57% while self-employed
segment constitute 43% of gross AUM respectively as of Dec’23. The company offers,
home loans, loan against property, loans for renovation and property extension and
loans for purchase of commercial property. Home loans constitute ~76%, while non-
home loans constitute ~24% of gross AUM respectively as of Dec’23. As Aadhar cater
to low income segment, the loans also classify for various affordable housing
schemes promoted by the Government of India, such as the Pradhan Mantri Awas
Yojana (PMAY). These loans constitute ~24% of live accounts and ~20% of Gross AUM
as of Dec’23. Out of total Disbursements, ~12% are new to credit customers and
average ticket size of loan is Rs 1mn with Avg LTV of 58%. As of Dec’23, the branch
network stood at 487 branches spread across 533 districts in 20 states. The branches
are evenly spread across states which reduces the geographic concentration risk with
no single state contributes >14% of AUM.
Exhibit 14: State wise AUM mix
14%
13%
13%
11%
10%
8%
7%
4%
4%
16%
MH
UP
RJ
GJ
MP
TN
TL
AP
KTK
Others
Rs 199bn
AUM
Dec-23
Source: RHP, Company, Systematix Institutional Research
The branch expansion is done in a calibrated and systematic manner by reviewing
factors like demographics and competitive landscape before establishing a branch.
Thus, Aadhar has strategically expanded to geographies where there is substantial
demand for housing finance in low income segment. Going ahead, rising urbanization
and continued expansion of physical and digital presence across India expected to
drive the growth. The current operating model, which Aadhar is following is scalable
and it will assist in expanding the operations with lower incremental costs to drive
efficiency and profitability.
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Exhibit 15: Size of the branch is linked to disbursement potential
Source: RHP, Company, Systematix Institutional Research
In addition with deeper penetration, Aadhar aims to focus on increasing its share of
low income housing segment and economically weaker and low-to-middle income
group segment and expand its customer base with the help of co-lending
arrangements with banks (2 PSUs and 1 private). As of Dec’23, Aadhar has more than
255000 live accounts.
Exhibit 16: Majority of housing shortfall expected to be driven by EWS / LIG segment
Source: RHP, Company, Systematix Institutional Research
Tech enabled solutions to improve cost efficiency in long run
In FY20, Aadhar invested in an integrated loan platform by TCS and launched a digital
transformation program which provides a more integrated digital platform for
various stages of a loan cycle onboarding, loan origination, accounting and reporting.
These tech enabled solutions are further expected to improve systems, processes
and controls. Operationally, tech solutions / digitization benefits through improved
underwriting processes, increased productivity, cost reduction and improved
collections through data-driven early warning systems. Its fully built distribution and
collections infrastructure is a key source of operating leverage and will help reduce
the operating expenses and credit cost in long run.
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Exhibit 17: Scalable tech & digital platform
Source: RHP, Company, Systematix Institutional Research
Exhibit 18: Focus on business transformation through data science…
Source: RHP, Company, Systematix Institutional Research
Exhibit 19: Branch efficciency comparison
Branch Efficiency (3QFY24)
AADHAR
AAVAS
APTUS
HFFC
INDIA
SHELTER
AUM per branch (mn)
408
458
308
733
261
Disbursement/ Branch (mn)*
143
155
117
328
126
Employee per branch (no.)
8
18
11
10
15
Opex per Branch (mn)*
12
15
8
20
11
Employee cost/ branch (mn)*
8
10
6
13
9
Other Opex/ branch (mn)*
3
5
2
6
2
Profit per branch (mn)*
17
13
24
26
12
Source: RHP, Company, Systematix Institutional Research,; Note: * Annualised
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Extensive underwriting and healthy collections leading to robust asset
quality
Aadhar has implemented a robust and comprehensive credit assessment, risk
management and collections framework to identify, monitor and manage risks in
operations. The company primarily caters to retail segment, a majority of whom are
salaried individuals purchasing residential properties. Thus, asset quality has been
largely maintained healthy. The company has streamlined its sanction, pre-
disbursement and post disbursement processes on IT platform, which cover the
entire lifecycle of the customer from lead generation, credit underwriting, legal and
technical processes to loan disbursement and monitoring and collections. Its in-
house technical team comprises of civil engineers which assess property valuation
which enables Aadhar to make accurate valuations of the properties that they are
financing. In addition, it has in-house collection team which ensures timely
collections. During pandemic, management changed its strategy and focused more
on salaried customers and conducted additional due diligence on customers to
assess the impact on their employment. Such measures helped in the improvement
of their collection efficiencies. Aadhar’s effective credit risk management policies and
framework is reflected in its portfolio quality indicators such as high repayment rates
(20-22%) and low rates of GNPAs and NNPAs across cycles. As of Dec’23, its gross
stage 3 and net stage 3 stood at 1.4% and 0.9% respectively and all the outstanding
loans are secured by mortgage over property or other security. Since past three
years, credit cost was maintained at < 50bps.
Exhibit 20: Credit assessment by in-house team…
Source: RHP, Company, Systematix Institutional Research
Improved share of non housing loans supported NIM expansion
AHFL’s funding profile is fairly diversified and comprises of loans from banks (55%),
refinance from NHB (27%), NCDs (18%), and others (2%) as of Dec’23. In terms of
fund raising, post the change in ownership, its has been able to raise funds regularly
from diversified funding sources and relatively at low-cost rates from NHB. Despite
the systemic hardening of interest rates, its cost of borrowing has been steadily
declining due to its proactive and flexible fundraising strategy. With an aim to
expand its NIMs, managenment aim to diversify its funding sources, identify new
sources and pools of capital, and implement robust asset liability management
policies. The share of home loan segment (yields at ~12-13%) declined to 76% in
9MFY24 from 84% in FY19, while share of non-home loan segment (yields at 15-17%)
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gone up to 24% in 9MFY24 from 15% in FY19 thereby maintaining spreads. Hence
going ahead, with increasing share of relatively higher-yielding non-home loan
portfolio and increase in lending rates, AHFL expected to protect its spreads,
resulting in healthy NIMs (~7% in 9MFY24).
Exhibit 21: Share of high yield non-housing book is increasing
84
85
85
82
78
76
15
14
15
18
22
24
0.95
0.37
0.02
0.01
0
25
50
75
100
FY19 FY20 FY21 FY22 FY23 9MFY24
(%)
Home loan LAP Project Loans
Source: RHP, Company, Systematix Institutional Research
Exhibit 22: Higher yields and lower cost has been aiding NIM expansion
14.3
14.3
14.6
13.6
13.8
14.9
10.0
8.9
8.2
7.2
7.0
7.8
4.3
5.4
6.5
6.4
6.8
7.1
4.1
3.9
4.9
5.5
6.1
6.8
0
5
9
14
18
FY19 FY20 FY21 FY22 FY23 9MFY24
(%)
Yields Cost of Borrowing Spread NIMs
Source: RHP, Company, Systematix Institutional Research
Strong parentage provides access to diversified and cost efficient
borrowings
AHFL is backed by BCP Topco (managed and advised by Blackstone Group Inc) which
currently holds 98.7% and hence benefit from blackstone’s resources, relationships
and expertise. Over the years, AHFL have secured funding from various sources
including term loans; proceeds from loans assigned; proceeds from the issuance of
NCDs; refinancing from the NHB; and subordinated debt borrowings from banks,
mutual funds, insurance companies and other domestic and foreign financial and
development finance institutions.
AHFL’s funding profile is fairly diversified and comprises of loans from banks (55%),
refinance from NHB (27%), NCDs (18%), and others (2%) as of Dec’23. In terms of
fund raising, post the change in ownership, Aadhar Housing Finance has been able to
raise funds regularly from diversified funding sources and relatively at low-cost rates
from NHB.
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Its cost of borrowing has steadily declined (from 10% in FY19 to 7% in FY23) led by
proactive and flexible fundraising strategy. The Company intends to continue to
diversify its funding sources, identify new sources and pools of capital, and
implement robust asset liability management policies with the aim of optimising its
cost of borrowings and aid its NIMs. It also intends to further increase the share of
NHB refinancing in its total borrowings and access international sources of funding to
reduce its overall cost of borrowing.
Its average cost of borrowings reduced from 8.2% in FY21 to 7.0% in FY23 and
increased slightly to 7.6% for 9MFY24.
Exhibit 23: Diverse funding mix with low short term exposure
Source: RHP, Company, Systematix Institutional Research
Exhibit 24: Borrowing mix…
66
72
62
60
54
20
18
21
17
21
11
8
16
22
25
1
1
1
1
1
3
1
0%
25%
50%
75%
100%
FY19 FY20 FY21 FY22 FY23
Term loans from Banks/FI NCD NHB Refinancing Subordianted Liabilities Cash credit Others
Source: RHP, Company, Systematix Institutional Research
Experienced and seasoned management team enhance confidence
Aadhar has a strong, experienced and dedicated management team, with senior
management team together having an average experience of more than two
decades in the financial services industry. The management is headed by Mr Rishi
Anand (MD & CEO) who has a vast experience of more than 27 years in the financial
services sector. Prior to this he held position of the COO of AHFL. Mr. Rajesh
Viswanathan is a Chief Financial Officer (CFO) of AHFL and he is a Chartered
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Accountant with overall experience of over 25 years. Mr. Anmol Gupta is Chief
Treasury Officer (CTO), has over 20 years of experience in Planning & Control. Its
promoter, BCP Topco (managed and advised by Blackstone Group Inc) currently
holds ~98.7% and it will sale ~22% stake, but continue to hold majority in the
company. Hence, AHFL strengthened its corporate governance framework, with the
induction of three independent directors, one of whom serves as Non-Executive
Chairman. Operational oversight has been reflected through the undertaking of
various measures such as overhaul of the IT systems and technology and
consolidation of branches to bring in operational efficiencies.
Key risks
Geographic concentration in certain states: ~50% of AUM and ~45% of branches
are concentrated in four states viz. Uttar Pradesh, Maharashtra, Madhya Pradesh
and Gujarat. Any significant social, political or economic disruption, or natural
calamities could disrupt their business operwations, which will require the company
to make a significant expenditure and change in business strategies. The occurrence
or inability to effectively respond to any such event, could have an adverse effect on
the business and results of operations.
Highly competitive market: The housing finance industry in India is highly
competitive and Aadhar competes other HFCs, small finance banks and NBFCs in
each of the geographies in which it operates. Competitors may have more resources,
a wider branch and distribution network, access to cheaper funding, superior
technology and may have a better understanding of and relationships with
customers in these markets. The ability to compete effectively will depend on ability
to maintain or increase margins.
Higher dependency on direct selling agents (DSAs): Over past few years, Aadhar’s
dependency on DSAs for sourcing of loans has been increased from 28.7%
(contribution to total disbursements) in FY21 to 45.7% in 9MFY24. Higher
dependency on DSAs could lead to increase in balance transfers (currently at 6-6.5%)
Valuation
Aadhar Housing Finance (AHFL) is a bet on low ticket size affordable housing
segment. Given the current size of AHFL, the company is well positioned to capture
the huge untapped opportunity in ticket size below Rs 1.5mn via deeper penetration
in new geographies and increase in potential customer base. Wide distribution
network and strong underwriting practices bodes well for growth and asset quality.
In addition, experienced management team with strong track record along with
backing of Blackstone boost confidence. At the upper end of the price band (Rs 300-
315), the issue is valued at ~2.5x Dec’23 BV (including capital raise) with RoA of ~4%
and RoE of ~18%, which looks attractive vs peers which are trading at ~3.5x BV
(Avg.). Hence, we recommend investors to subscribe this issue.
Exhibit 25: HFCs peer valuations
Loan Book (Rs bn)
RoA (%)
RoE (%)
BV (Rs)
P/BV (x)
FY22
FY23
FY24E
FY22
FY23
FY24E
FY22
FY23
FY24E
FY22
FY23
FY24E
FY22
FY23
FY24E
AADHAR *
133
147
172
2.6
3.2
3.7
13.5
15.2
16.6
63
74
87
5.0
4.3
3.6
AAVAS
113
141
173
3.6
3.5
3.3
13.6
14.1
13.9
355
413
476
4.5
3.8
3.3
HFFC
53
71
96
3.9
3.9
3.7
12.6
13.5
15.7
179
206
236
5.0
4.3
3.8
APTUS
51
67
87
7.3
7.8
7.6
15.1
16.1
17.2
59
66
75
5.5
4.8
4.3
INDIA SHELTER
31
43
60
4.5
4.1
4.5
12.8
13.4
13.2
100
116
211
5.7
5.0
2.7
Source: RHP, Company, Systematix Institutional Group, Note: # P/BV at ~2.5x (post capital raise); * FY24 figures for Aadhar are Projected based on 9MFY24
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Peer comparison
Exhibit 26: Peer Comparison - Key Financial parameters
Particulars (Rs mn)
Aadhar
Aavas
HFFC
Aptus
FY23
9MFY24
FY23
9MFY24
FY23
9MFY24
FY23
9MFY24
Asset Under Management (AUM)
172,228
198,652
141,667
160,795
71,980
90,137
67,383
80,717
Disbursements
59,026
49,041
50,245
36,891
30,129
28,615
23,950
21,590
Profit After Tax
5,643
5,479
4,296
3,482
2,283
2,223
5,030
4,479
Average yield on Loan Book (%)
12.8%
14.0%
12.6%
14.0% *
13.3%
13.8%
17.7%
17.8% *
Average cost of borrowings (%)
7.0%
7.6%
6.6%
7.5% *
7.3%
8.1%
8.5%
8.8%
Spread (%)
5.8%
6.4%
6.0%
6.5% *
5.9%
5.7%
9.2%
8.9% *
Operating Expenses /
Average Total Assets (%)
3.1%
3.3%
3.8%
3.6% *
2.9%
2.9%
2.6%
2.5%
Cost to Income Ratio (%)
38.1%
36.2%
45.0%
46.1%
35.5%
35.7%
19.4%
20.0%
Return on Total Assets (%)
3.6%
4.2%
3.5%
3.2% *
3.9%
3.8%
7.8%
7.7%
Return on Equity (%)
16.5%
18.4%
14.1%
13.5% *
13.5%
15.4%
16.1%
17.0%
Gross NPA to AUM (%)
1.2%
1.4%
0.9%
1.1%
1.6%
1.7%
1.2%
1.2% *
Net NPA to AUM (%)
0.8%
1.0%
0.7%
0.8% *
1.1%
1.2%
0.9%
0.9%
Net worth
36,976
42,491
32,697
36,314
18,173
20,318
33,393
37,014
Debt to Net worth ratio
3.3
3.1
3.0
3.3 *
2.6
3.4
1.1
1.2
CRAR (%)
42.7%
39.7%
47.0%
45.0%
49.4%
40.9%
77.4%
70.5%
Number of branches
469
487
346
351
111
123
231
262
Number of States
20
20
13
13
13
13
5
6
Source: RHP, Company, Systematix Institutional Group, Note: * Average figures
Exhibit 27: DuPont Analysis
Particulars (FY23)
Aadhar
Aavas
HFFC
Aptus
Interest Income
11.5
11.4
12.2
16.5
Interest Expense
5.2
4.8
5.1
4.3
Net Interest Income
6.3
6.5
7.1
12.2
Other income
1.7
1.8
1.2
1.1
Total Net Income
8.0
8.3
8.3
13.3
Total operating expenses
3.1
3.8
2.9
2.6
Pre-provision profit
5.0
4.6
5.3
10.7
Provisions
0.3
0.1
0.4
0.5
Profit before tax and
exceptional items
4.7
4.5
5.0
10.2
Profit before tax
4.8
4.5
5.0
10.2
Tax total
1.0
1.0
1.1
2.3
Reported Profit after tax
3.8
3.5
3.9
7.8
RoAE
16.6
14.1
13.5
16.1
Source: RHP, Company, Systematix Institutional Research
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Key charts
Exhibit 28: AUM growth gained momentum over last 3 years Exhibit 29: Non Home loan share has risen since FY21
100
114
133
148
172
199
26
14
17
11
17
20
0
10
19
29
38
0
63
125
188
250
FY19 FY20 FY21 FY22 FY23 9MFY24
(%)(Rs bn)
AUM YoY (RHS)
84
85
85
82
78
76
15
14
15
18
22
24
0.95
0.37
0.02
0.01
0
25
50
75
100
FY19 FY20 FY21 FY22 FY23 9MFY24
(%)
Home loan LAP Project Loans
Source: RHP, Company Source: RHP, Company
Exhibit 30: Disbursements growth has been strong Exhibit 31: Yield, cost of borrowing, NIMs
32
32
35
40
59
17
(18)
(0)
11
13
48
17
(25)
0
25
50
75
0
18
35
53
70
FY19 FY20 FY21 FY22 FY23 9MFY24
(%)(Rs bn)
Disbursement YoY (RHS)
14.3
14.3
14.6
13.6
13.8
14.9
10.0
8.9
8.2
7.2
7.0
7.8
4.3
5.4
6.5
6.4
6.8
7.1
4.1
3.9
4.9
5.5
6.1
6.8
0
5
9
14
18
FY19 FY20 FY21 FY22 FY23 9MFY24
(%)
Yields Cost of Borrowing Spread NIMs
Source: RHP, Company Source: RHP, Company
Exhibit 32: Asset quality healthy and stable Exhibit 33: Healthy RoA profile
1,310 1,350 1,837 1,626 2,308
1.4
1.2
1.5
1.2
1.4
0.9
0.9
1.1
0.8
0.9
0.0
0.4
0.8
1.2
1.6
0
625
1,250
1,875
2,500
FY20 FY21 FY22 FY23 9MFY24
(%)
(Rs bn)
Gross stage 3 GS3 assets (RHS) NS3 assets (RHS)
2.0
1.7
2.6
3.2
3.7
4.6
22.3
11.8
13.5
15.2
16.6
19.7
10.9
6.8
5.2
4.8
4.5
4.3
0
7
14
20
27
FY19 FY20 FY21 FY22 FY23 9MFY24
(%)
RoA RoE Leverage
Source: RHP, Company Source: RHP, Company
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FINANCIALS
Profit & Loss Statement
YE: Mar (Rs mn) FY21 FY22 FY23 FY24P
Net interest income 6,110 7,771 9,771 12,768
Other income 1,486 1,903 2,672 3,177
Net Income 7,596 9,674 12,443 15,944
Operating expenses 2,721 3,513 4,743 5,796
Preprovision profit 4,875 6,161 7,700 10,148
Provisions 549 487 492 568
Profit before tax 4,325 5,674 7,458 9,830
Tax 924 1,225 1,511 1,991
Tax rate 21.4 21.6 20.3 20.3
Reported Profit after tax 3,401 4,449 5,948 7,839
Source: Company, Systematix Institutional Research, Note: FY24P based on 9MFY24
Balance Sheet
YE: Mar (Rs mn) FY21 FY22 FY23 FY24P
Equity 3,948 3,948 3,948 3,948
Reserves 22,981 27,519 33,029 40,084
Net worth 26,928 31,467 36,977 44,032
Borrowings 103,745 106,746 121,535 137,091
Others 5,630 5,545 7,668 8,018
Total liabilities 136,303 143,758 166,179 189,141
Cash 21,713 17,102 19,180 14,473
Investments 4,971 3,380 4,594 4,962
Loans 106,133 119,603 138,515 165,223
Others 2,956 3,122 3,257 3,722
Total assets 136,303 143,758 166,179 189,141
Source: Company, Systematix Institutional Research, Note: FY24P based on 9MFY24
Key Ratios
YE: Mar FY21 FY22 FY23 FY24P
Yield on portfolio 14.6 13.6 13.8 15.0
cost of borrowings 8.2 7.2 7.0 7.7
Interest Spread 6.5 6.4 6.8 7.3
NIM (on AUM) 4.9 5.5 6.1 6.7
Cost/ Income (%) 35.8 36.3 38.1 36.4
Credit cost (%) 0.4 0.3 0.3 0.3
RoA(%) 2.6 3.2 3.7 4.3
RoE(%) 13.5 15.2 16.6 18.7
Leverage (x) 5.2 4.8 4.5 4.4
Gross NPA (%) 1.2 1.5 1.2 1.4
Net NPA (%) 0.9 1.1 0.8 0.9
Provision coverage (%) 32.1 29.7 34.2 37.0
Source: Company, Systematix Institutional Research, Note: FY24P based on 9MFY24
Dupont (as % of Average Assets)
YE: Mar FY21 FY22 FY23 FY24P
Interest Income 11.0 11.0 11.5 12.8
Interest Expense 6.3 5.4 5.2 5.6
Net Interest Income 4.7 5.5 6.3 7.2
Other income total 1.1 1.4 1.7 1.8
Net Income total 5.8 6.9 8.0 9.0
Operating expenses total 2.1 2.5 3.1 3.3
Preprovision profit 3.8 4.4 5.0 5.7
Provisions 0.4 0.3 0.3 0.3
Profit before tax and exce. items 3.3 4.1 4.7 5.4
Profit after tax 2.6 3.2 3.8 4.4
Source: Company, Systematix Institutional Research, Note: FY24P based on 9MFY24
Growth
YE: Mar (%) FY21 FY22 FY23 FY24P
Net interest income 45.1 27.2 25.7 30.7
Net Income total 27.7 27.4 28.6 28.1
Preprovision profit 43.1 26.4 25.0 31.8
Profit before tax 87.3 31.2 31.5 31.8
Profit after tax 79.6 30.8 33.7 31.8
Loan 19.1 12.7 15.8 19.3
Disbursement 11.1 12.6 47.9 22.0
AUM 16.6 10.9 16.5 20.0
Source: Company, Systematix Institutional Research, Note: FY24P based on 9MFY24
Valuation ratios
YE: Mar FY21 FY22 FY23 FY24P
FDEPS (Rs) 8.0 10.4 13.4 17.8
PER (x) 39.5 30.2 23.6 17.7
Book value (Rs) 63.1 73.8 86.7 103.2
P/BV (Rs) 5.0 4.3 3.6 3.1
Adjusted book value (Rs) 61.0 70.8 84.2 99.7
P/ABV (Rs) 5.2 4.5 3.7 3.2
P/PPP (x) 27.6 21.8 17.4 13.2
Dividend yield (%) 0.0 0.0 0.0 0.0
Source: Company, Systematix Institutional Research, Note: FY24P based on 9MFY24,
P/BV at ~2.5x (post capital raise)
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Nikhil Khandelwal Managing Director +91-22-6704 8001 nikhil@systematixgroup.in
Equity Research
Analysts Industry Sectors Desk-Phone E-mail
Dhananjay Sinha Co Head of Equities & Head of Research - Strategy & Economics +91-22-6704 8095 dhananjaysinha@systematixgroup.in
Abhishek Mathur FMCG +91-22-6704 8059 abhishekmathur@systematixgroup.in
Ashish Poddar Consumer Durables, EMS, Building Materials, Small-Mid Caps +91-22-6704 8039 ashishpoddar@systematixgroup.in
Himanshu Nayyar Consumer Staples & Discretionary +91-22-6704 8079 himanshunayyar@systematixgroup.in
Manjith Nair Banking, Insurance +91-22-6704 8065 manjithnair@systematixgroup.in
Pradeep Agrawal NBFCs & Diversified Financials +91-22-6704 8024 pradeepagrawal@systematixgroup.in
Pratik Tholiya Specialty & Agro Chem, Fertilisers, Sugar, Textiles and Select Midcaps +91-22-6704 8028 pratiktholiy[email protected]
Sameer Pardikar IT & ITES +91-22-6704 8041 sameerpardikar@systematixgroup.in
Santosh Yellapu Capital Goods +91-22-6704 8094 santoshyellapu@systematixgroup.in
Shweta Dikshit Metals & Mining +91-22-6704 8042 shwetadikshit@systematixgroup.in
Sudeep Anand Oil & Gas, Logistics, Cement, Wagons +91-22-6704 8085 sudeepanand@systematixgroup.in
Vishal Manchanda Pharmaceuticals and Healthcare +91-22-6704 8064 vishalmanchanda@systematixgroup.in
Chetan Mahadik Consumer Staples & Discretionary +91-22-6704 8091 chetanmahadik@systematixgroup.in
Deeksha Bhardwaj Strategy & Economics +91-22-6704 8017 deekshabhardwaj@systematixgroup.in
Devanshi Kamdar IT & ITES +91-22-6704 8098 devanshikamdar@systematixgroup.in
Hinal Kothari Metals & Mining +91-22-6704 8076 hinalkothari@systematixgroup.in
Jennisa Popat Oil & Gas, Logistics, Cement, Wagons +91-22-6704 8066 jennisapopat@systematixgroup.in
Kalash Jain Midcaps +91-22-6704 8038 kalashjain@systematixgroup.in
Krisha Zaveri Consumer Durables, EMS, Building Materials, Small-Mid Caps +91-22-6704 8023 krishazaveri@systematixgroup.in
Mahek Shah Consumer Durables, EMS, Building Materials, Small-Mid Caps +91-22-6704 8040 mahekshah@systematixgroup.in
Nirali Chheda Banking, Insurance +91-22-6704 8019 niralichheda@systematixgroup.in
Pashmi Chheda Banking, Insurance +91-22-6704 8063 pashmichheda@systematixgroup.in
Pravin Mule NBFCs & Diversified Financials +91-22-6704 8034 pravinmule@systematixgroup.in
Prathmesh Kamath Oil & Gas, Logistics, Cement, Wagons +91-22-6704 8022 prathmeshkamath@systematixgroup.in
Purvi Mundhra Macro-Strategy +91-22-6704 8078 purvimundhra@systematixgroup.in
Rajesh Mudaliar Consumer Staples & Discretionary +91-22-6704 8084 rajeshmudaliar@systematixgroup.in
Ronak Dhruv NBFCs & Diversified Financials +91-22-6704 8045 ronakdhruv@systematixgroup.in
Rushank Mody Pharmaceuticals and Healthcare +91-22-6704 8046 rushankmody@systematixgroup.in
Swati Saboo Midcaps +91-22-6704 8043 swatisaboo@systematixgroup.in
Vivek Mane Pharmaceuticals and Healthcare +91-22-6704 8046 vivekmane@systematixgroup.in
Yogeeta Rathod Midcaps +91-22-6704 8081 yogeetaratho[email protected]n
Equity Sales & Trading
Name Desk-Phone E-mail
Vipul Sanghvi Co Head of Equities & Head of Sales +91-22-6704 8062 vipulsanghvi@systematixgroup.in
Jignesh Desai Sales +91-22-6704 8068 jigneshdesai@systematixgroup.in
Sidharth Agrawal Sales +91-22-6704 8090 sidharthagrawal@systematixgroup.in
Shreya Chaudhary Sales +91-22-6704 8033 shreyachaudhar[email protected]n
Rahul Khandelwal Sales +91-22-6704 8003 rahul@systematixgroup.in
Chintan Shah Sales +91-22-6704 8061 chintanshah@systematixgroup.in
Pawan Sharma Director and Head - Sales Trading +91-22-6704 8067 pawansharma@systematixgroup.in
Mukesh Chaturvedi Vice President and Co Head - Sales Trading +91-22-6704 8074 mukeshchaturvedi@systematixgroup.in
Vinod Bhuwad Sales Trading +91-22-6704 8051 vinodbhuwad@systematixgroup.in
Rashmi Solanki Sales Trading +91-22-6704 8097 rashmisolanki@systematixgroup.in
Karan Damani Sales Trading +91-22-6704 8053 karandamani@systematixgroup.in
Vipul Chheda Dealer +91-22-6704 8087 vipulchheda@systematixgroup.in
Paras Shah Dealer +91-22-6704 8047 parasshah@systematixgroup.in
Rahul Singh Dealer +91-22-6704 8054 rahulsingh@systematixgroup.in
Niraj Singh Dealer +91-22-6704 8096 nirajsingh@systematixgroup.in
Corporate Access
Mrunal Pawar Vice President & Head Corporate Access +91-22-6704 8088 mrunalpawar@systematixgroup.in
Darsha Hiwrale Associate Corporate Access +91-22-6704 8083 darshahiwrale@systematixgroup.in
Production
Madhu Narayanan Editor +91-22-6704 8071 madhunarayanan@systematixgroup.in
Mrunali Pagdhare Production +91-22-6704 8057 mrunalip@systematixgroup.in
Vijayendra Achrekar Production +91-22-6704 8089 vijayendraachrekar@systematixgroup.in
Operations
Sachin Malusare Vice President +91-22-6704 8055 sachinmalusare@systematixgroup.in
Jignesh Mistry Manager +91-22-6704 8049 jigneshmistry@systematixgroup.in
Hiren Patel Assistant Manager +91-22-6704 8056 hirenpatel@systematixgroup.in
Institutional Equities Team
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DISCLOSURES/APPENDIX
I. ANALYST CERTIFICATION
I, Pradeep Agrawal, Pravin Mule, Ronak Dhruv; hereby certify that (1) views expressed in this research report accurately reflect my/our personal views about any or all of the subject
securities or issuers referred to in this research report, (2) no part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations or views
expressed in this research report by Systematix Shares and Stocks (India) Limited (SSSIL) or its group/associate companies, (3) reasonable care is taken to achieve and maintain
independence and objectivity in making any recommendations.
Disclosure of Interest Statement
Update
Analyst holding in the stock
No
Served as an officer, director or employee
No
II. ISSUER SPECIFIC REGULATORY DISCLOSURES, unless specifically mentioned in point no. 9 below:
1. The research analyst(s), SSSIL, associates or relatives do not have any financial interest in the company(ies) covered in this report.
2. The research analyst(s), SSSIL, associates or relatives collectively do not hold more than 1% of the securities of the company(ies) covered in this report as of the end of the
month immediately preceding the distribution of the research report.
3. The research analyst(s), SSSIL, associates or relatives did not have any other material conflict of interest at the time of publication of this research report.
4. The research analyst, SSSIL and its associates have not received compensation for investment banking or merchant banking or brokerage services or any other products or
services from the company(ies) covered in this report in the past twelve months.
5. The research analyst, SSSIL or its associates have not managed or co-managed a private or public offering of securities for the company(ies) covered in this report in the previous
twelve months.
6. SSSIL or its associates have not received compensation or other benefits from the company(ies) covered in this report or from any third party in connection with this research
report.
7. The research analyst has not served as an officer, director or employee of the company(ies) covered in this research report.
8. The research analyst and SSSIL have not been engaged in market making activity for the company(ies) covered in this research report.
9. Details of SSSIL, research analyst and its associates pertaining to the companies covered in this research report:
Sr.
No.
Particulars
Yes /
No.
1
Whether compensation was received from the company(ies) covered in the research report in the past 12 months for investment banking transaction by SSSIL.
No
2
Whether research analyst, SSSIL or its associates and relatives collectively hold more than 1% of the company(ies) covered in the research report.
No
3
Whether compensation has been received by SSSIL or its associates from the company(ies) covered in the research report.
No
4
Whether SSSIL or its affiliates have managed or co-managed a private or public offering of securities for the company(ies) covered in the research report in the
previous twelve months.
No
5
Whether research analyst, SSSIL or associates have received compensation for investment banking or merchant banking or brokerage services or any other
products or services from the company(ies) covered in the research report in the last twelve months.
No
10. There is no material disciplinary action taken by any regulatory authority that impacts the equity research analysis activities.
STOCK RATINGS
BUY (B): The stock's total return is expected to exceed 15% over the next 12 months.
HOLD (H): The stock's total return is expected to be within -15% to +15% over the next 12 months.
SELL (S): The stock's total return is expected to give negative returns of more than 15% over the next 12 months.
NOT RATED (NR): The analyst has no recommendation on the stock under review.
INDUSTRY VIEWS
ATTRACTIVE (AT): Fundamentals/valuations of the sector are expected to be attractive over the next 12-18 months.
NEUTRAL (NL): Fundamentals/valuations of the sector are expected to neither improve nor deteriorate over the next 12-18 months.
CAUTIOUS (CS): Fundamentals/valuations of the sector are expected to deteriorate over the next 12-18 months.
III. DISCLAIMER
The information and opinions contained herein have been compiled or arrived at based on the information obtained in good faith from sources believed to be reliable. Such information
has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy completeness or correctness.
This document is for information purposes only. This report is based on information that we consider reliable; we do not represent that it is accurate or complete and one should exercise
due caution while acting on it. Description of any company(ies) or its/their securities mentioned herein are not complete and this document is not and should not be construed as an
offer or solicitation of an offer to buy or sell any securities or other financial instruments. Past performance is not a guide for future performance, future returns are not guaranteed and
a loss of original capital may occur. All opinions, projections and estimates constitute the judgment of the author as on the date of the report and these, plus any other information
contained in the report, are subject to change without notice. Prices and availability of financial instruments are also subject to change without notice. This report is intended for
distribution to institutional investors.
This report is not directed to or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity that is a citizen or resident or located in any
locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject to SSSIL or
its affiliates to any registration or licensing requirement within such jurisdiction. If this report is inadvertently sent or has reached any individual in such country, especially USA, the same
may be ignored and brought to the attention of the sender. Neither this document nor any copy of it may be taken or transmitted into the United States (to U.S. persons), Canada, or
Japan or distributed, directly or indirectly, in the United States or Canada or distributed or redistributed in Japan or to any resident thereof. Any unauthorized use, duplication,
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redistribution or disclosure of this report including, but not limited to, redistribution by electronic mail, posting of the report on a website or page, and/or providing to a third party a link,
is prohibited by law and will result in prosecution. The information contained in the report is intended solely for the recipient and may not be further distributed by the recipient to any
third party.
SSSIL generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any
companies that the analysts cover. Additionally, SSSIL generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of
any companies that they cover. Our salespeople, traders, and other professionals or affiliates may provide oral or written market commentary or trading strategies to our clients that
reflect opinions that are contrary to the opinions expressed herein. Our proprietary trading and investing businesses may make investment decisions that are inconsistent with the
recommendations expressed herein. The views expressed in this research report reflect the personal views of the analyst(s) about the subject securities or issues and no part of the
compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The
compensation of the analyst who prepared this document is determined exclusively by SSSIL; however, compensation may relate to the revenues of the Systematix Group as a whole, of
which investment banking, sales and trading are a part. Research analysts and sales persons of SSSIL may provide important inputs to its affiliated company(ies).
Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations which could have an adverse effect on their value or price or the income
derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies, effectively assume currency risk. SSSIL, its directors, analysts
or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on the basis of this report
including but not restricted to fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the dividend or income, etc.
SSSIL and its affiliates, officers, directors, and employees subject to the information given in the disclosures may: (a) from time to time, have long or short positions in, and buy or sell, the
securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation (financial interest)
or act as a market maker in the financial instruments of the company (ies) discussed herein or act as advisor or lender / borrower to such company (ies) or have other potential material
conflict of interest with respect to any recommendation and related information and opinions. The views expressed are those of the analyst and the company may or may not subscribe
to the views expressed therein.
SSSIL, its affiliates and any third party involved in, or related to, computing or compiling the information hereby expressly disclaim all warranties of originality, accuracy, completeness,
merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall SSSIL, any of its affiliates or any third
party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. The company accepts no liability whatsoever for the actions of
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company has not reviewed the linked site. Accessing such website or following such link through the report or the website of the company shall be at your own risk and the company
shall have no liability arising out of, or in connection with, any such referenced website.
SSSIL will not be liable for any delay or any other interruption which may occur in presenting the data due to any technical glitch to present the data. In no event shall SSSIL be liable for
any damages, including without limitation, direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection with the data presented by SSSIL
through this presentation.
SSSIL or any of its other group companies or associates will not be responsible for any decisions taken on the basis of this report. Investors are advised to consult their investment
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