- **AAVAS Financiers is a housing finance company that turns the informal income of India’s small-town households into a formal path to homeownership - its entire model rests on the ability to look at a self-employed tailor or a salaried shopkeeper and see a reliable borrower where a traditional bank sees only missing tax returns. Born in 2011 as a subsidiary of AU Financiers, it was bought by private-equity investors in 2017, listed in 2018, and in 2025 welcomed CVC Capital Partners as its new promoter, all while sticking to one recurring discipline: go deep into underserved Tier‑2 and Tier‑3 towns, assess what a family really earns rather than what its paperwork says, and lend against a home that the borrower will live in.** # Business segments A single engine - mortgage-backed loans to low- and middle-income households in semi-urban and rural India - that expresses itself through three product lines: home loans for purchase and construction, loans against property, and small-ticket MSME loans, all secured by residential real estate and underwritten with the same cash-flow lens. ## 1. Affordable home loans: the core mortgage book **The company lends small sums to families that banks often overlook, using on-the-ground income assessment instead of formal tax documents, and keeps the loans on its own books so that underwriting discipline never leaves its hands.** - **Lends against real homes, not paper projects** - almost every home loan finances a single-unit, owner-occupied property; the company does not touch builder finance, land loans, under-construction apartments, or loans above ₹1 crore, so the collateral is always a real house someone lives in. - **Assesses income the way the local economy works** - for the 39% of customers who are self-employed and the many who lack full tax returns, credit officers - often Chartered Accountants - make multiple site visits and build a cash-flow picture from local market knowledge, which is why the company calls this its “assessed income” strength. - **Filters out three of every four applications** - a 72% rejection rate means only about one-third of loan applications are approved, enforced through a four-pillar risk architecture of credit, legal, technical, and risk containment checks that operate independently to prevent collusion. - **Keeps credit losses extraordinarily low** - lifetime write-offs are just 11 basis points against roughly ₹409 billion of cumulative disbursements, and gross stage‑3 assets stand at 1.05%, a result of that tight filter and a collections machine that uses AI to predict which customers might miss a payment before they do. - **Earns a wide spread by pricing risk, not by taking it** - the contractual yield on the loan book is 12.82% against a cost of borrowings of 7.62%, producing a spread of 5.20%, and the company adjusts pricing by geography and customer segment rather than applying one rate to all. ## 2. Loans against property and MSME loans: the same mortgage lens on a different need **When a small shopkeeper or a self-employed household needs working capital, the company lends against the same residential property - a higher-yielding book that still sits on the same underwriting chassis.** - **Secured by the same residential roof** - these are mortgage-backed loans with an average loan-to-value of roughly 50%, and they qualify as priority-sector lending, which makes them easier to securitise and sell down when the company wants liquidity. - **Carries a yield differential of 200-250 basis points** between the housing loan and non-housing loan portfolio, so the blended portfolio yield rises without the company having to stretch its credit appetite. - **Funded by a dedicated MSME institution** - the company was the first in its industry to tie up with an MSME sector development institution for funding, and it has also entered co-lending arrangements with a large public-sector bank, giving this book its own liability stream. ## 3. Green housing finance: a niche that builds the brand **A small but distinctive programme that finances self-built homes meeting EDGE green-building standards, supported by IFC and the UK government, and gives the company a story that travels beyond its branch network.** - **Makes the borrower’s home 20% more efficient** - the company pays the full certification cost and offers an interest-rate benefit on homes that meet the EDGE standard for construction features, water, and energy, so the customer gets a lower running cost and the company gets a differentiated product. - **Certified over 650 homes so far** - 300 of those were added in FY26 alone, and the programme reached a milestone of 500 EDGE-certified homes by February 2026, with certification done by Sintali, a UK-accredited agency. - **Trains the whole supply chain** - “Green Samvaad” seminars have engaged more than 330 masons, contractors, and builders, while 3,600-plus employees have been trained through the company’s internal app, so the green message reaches the people who actually build the houses. # Distribution and technology backbone **A physical network of 435 branches in 15 states, combined with a recently rebuilt digital stack, turns local presence into a sourcing-and-collections engine that feeds every product line.** - **Branches sit where the customers live** - more than 80% of branches are in Tier‑3 cities and beyond, covering over 2,500 towns, and the company expands contiguously, spending two to three years learning a new state’s cash-flow patterns and legal behaviour before scaling. - **Sourcing is in-house and multi-channel** - direct sourcing through open-market canvassing and canopy activity is the core, supplemented by digital channels, connector networks (cement vendors, lawyers), channel partners, government e-Mitra kiosks, and a customer referral programme, all managed with a weekly funnel discipline that has cut login-to-sanction time from 13 days to 6. - **Collections went digital** - field collection has dropped from 50% of activity to 22%, with 100% of receipts generated digitally and field officers tracked in real time through the company’s app, while a Gen‑AI voice bot handled roughly 107,000 conversations in FY26. - **The technology core was rebuilt on cloud platforms** - a new Loan Origination System on Salesforce, a Loan Management System on Oracle Flexcube, and an ERP on Oracle Fusion went live, stitched together by 350‑plus APIs through Mulesoft, all on a variable-cost opex model with prices fixed for five years. # Group structure and partners **The company is a publicly listed, non-deposit-taking housing finance company regulated by the RBI through the National Housing Bank, and since mid‑2025 it has been controlled by CVC Capital Partners, one of the world’s largest private-markets firms.** - **CVC acquired control in June 2025** - Aquilo House Pte. Ltd., a Singapore entity within the CVC network, bought 26.47% of the company from the previous private-equity promoters (Kedaara Capital and Partners Group) and then acquired further shares through a mandatory open offer, taking its total holding to 48.96%. - **The promoter’s core stake is locked** - Aquilo House has given the National Housing Bank a non-disposal undertaking over the 26.47% block, meaning it cannot sell or encumber those shares without the regulator’s consent. - **The liability franchise spans 35‑plus lenders** - funding partners include the Asian Development Bank, International Finance Corporation, British International Investment, and the National Housing Bank; in FY26 the company raised its largest-ever NCD placement and issued its first AAA‑rated pass‑through certificates of around Rs. 500 million. - **The board blends independent oversight with promoter representation** - the nine‑member board includes three independent directors, a separate Chairperson, and four promoter nominee directors and one non-executive nominee director, with the MD & CEO role held separately by Manu Singh.