Blackstone Inc., one of the top private equity investment firms, is in no hurry to exit Aadhar Housing Finance, according to the Indian housing financer's Chief Executive Officer and Managing Director Rishi Anand. The New York-based private equity investment firm owns around 76% equity in the company after its listing.
However, eventually the private fund that Aadhar Housing Finance received from Blackstone will die soon. The life span of the fund was 10 years. Of this, five and a half years have been exhausted, Anand told NDTV Profit.
Aadhar Housing Finance is the largest low-income housing finance company, with asset under management at around Rs 24,000–25,000 crore.
Financial Outlook
Moving ahead, the company expects AUM to grow at the rate of 21–22% on annualised basis, Anand said. The comfortable AUM growth is coming from the kind of loans the company is funding. It's 100% secured retail asset.
As the emotion quotient is so high in this sector, the probability of the consumers defaulting and losing their house is meagre, the CEO said.
The last reported NIM of the financer was 9.2%. Aadhar Housing Finance works at something called spreads, which is at the average of 5.8–5.9%. The company is focused on cutting operating expenditure. The operating expenditure will likely decrease 10–15% year-on-year in next three-to-four years, the top executive said.
Rate Cut To Have Little Impact
With expectations of rate cuts, there are questions on how Aadhar Housing Finance will manage the book. However, the firm will be able to maintain the assets and liabilities at the current level, according to Anand. This is because close to about 80% of the liabilities are floating in nature. Hence, Aadhar Housing Finance will pass on the effects of rate cuts directly to the consumers.
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