Aavas Financiers Raises Rs 200 Cr from CDC Group via Issuance of Rupee Denominated Masala Bonds – CORPORATE ETHOS

Aavas Financiers Raises Rs 200 Cr from CDC Group via Issuance of Rupee Denominated Masala Bonds

By: | December 20, 2018
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Dec 29: Aavas Financiers Ltd (Aavas), one of India’s leading affordable housing finance companies, on Thursday said that it has received investment from CDC Group Plc (CDC), the United Kingdom’s Development Finance Institution, to successfully raise Rs 200 crore by issuance of Rupee Denominated Masala Bonds. This is Aavas’s maiden Masala Bond issue and can be listed on London Stock Exchange or any other international stock exchanges in future.

Aavas is a retail focused affordable housing finance company, primarily serving low and middle-income self-employed customers to fulfill their home financing requirements. These customers, who make up a large proportion of India’s population, have limited or no access to formal banking credit due to lack of credit score or proven credit history. For the Half Year ended 30th September 2018, Aavas’ loan book stood at Rs 4,759 crores with Gross NPAs at 0.57%, capital adequacy ratio of 58.8% and a healthy ROA of 3.06%.

Commenting on the development, Sushil Kumar Agarwal, Whole Time Director & Chief Executive Officer, Aavas Financiers, said “It gives me immense pleasure to share that the Company was able to successfully raise this long-term
source of funds, in this current challenging environment. CDC’s investment in Aavas’s Masala Bonds
will further support the extension of affordable housing loans to low and middle income customers in underserved rural and semi-urban areas of India. We would like to thank all our investors for their trust and belief in the Company’s robust business model and we will continue to maintain our growth
trajectory despite the industry currently facing headwinds.”

According to Srini Nagarajan, CDC’s Managing Director and Head of Asia, “CDC’s commitment to Aavas will enable it to grow its affordable housing finance business that will help India’s low and middle income families to build their homes and improve overall economic prosperity in our markets. CDC’s long-term investment commitment to Aavas especially in the current liquidity situation demonstrates our commitment as a Development Finance Institution with long-term patient capital. CDC has been investing in India for over 30 years and we look forward to a productive long-term relationship with Aavas.”