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The private equity firm will acquire 26.47% from existing promoters at ₹1,635 per share. Existing promoters including Kedaara Capital and Partners Group are looking to exit their eight-year-old joint investment. Both held 26.47% stake at the end of the June quarter. CVC Capital Partners has made an open offer for Aavas Financiers to acquire an additional 26% stake in the company at ₹1,767 a share, according to a statement to the stock exchanges. The open offer will cost the company ₹3,664 crore if all shareholders accept the offer. Aavas Financiers was valued at ₹13,020 crore on Friday with its shares closing at ₹1,645 per share. According to reports, other private equity including EQT were in the race to buy Aavas stake. The stock has been a market laggard and has risen just 3% in the past 12 months. In 2024, so far the stock has delivered returns of 5%.

Aavas Financiers shares in focus as CVC Capital to acquire majority stake, triggers open offer

Buyout group EQT has emerged as a top contender to acquire affordable housing finance company Aavas Financiers Ltd (formerly AU Housing Finance Ltd) as promoters, private equity firms Kedaara Capital and Partners Group, are looking to exit their eight-year-old joint investment, said people in the know. EQT is competing with two other private equity peers, CVC Capital Partners and Bain Capital, ahead of binding offers that are expected early August as PE firms look to consolidate their position in the fast-growing sector.

EQT closing in on Aavas Financiers, Rs 7,000 cr deal up for grabs

AFL provides home loans to low- and middle-income borrowers, with 60% from self-employed clients. It invests in tech to enhance efficiency, asset quality, and risk management while focusing on scaling operations.


AFL operates in 14 states with 372 branches. Despite high concentration in Rajasthan, Maharashtra, and Gujarat (66.2% of AUM), it is expanding into new regions like Tamil Nadu, Karnataka, Odisha, and Uttar Pradesh.

The issuer has made timely interest payments.

As of Sept 30, 2024, AFL is 26.47% owned by Kedaara Capital and Partners Group. The management is led by CEO Sachinder Bhinder and CFO Ghanshyam Rawat, supported by 10+ CXOs.

AFL's strong capitalization includes a net worth of ₹4,001.22 crore and a gearing of 3.10x. Its Tier-1 CAR is 46.24%, well above regulatory requirements, providing a buffer against asset quality risks.


AFL’s funding is diversified with 48.5% from term loans, 19.8% from NHB, and 5.9% from NCDs. It has strong ties with major banks and international agencies. The average borrowing cost is 7.82%, with no short-term funding reliance.

AFL’s AUM grew 22.2% CAGR, reaching ₹18,396 crore in Sept 2024. Housing loans comprise 69%, non-housing 31%. NIMs dropped from 6.07% in FY24 to 5.83% in H1FY25, with RoTA at 3.29%.

Security Name: 6.25% Aavas Financiers Limited 25 Mar 2027

ISIN:

INE216P07225

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Aavas Financiers Limited

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Aavas Financiers shares in focus as CVC Capital to acquire majority stake, triggers open offer

EQT closing in on Aavas Financiers, Rs 7,000 cr deal up for grabs

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