CVC Capital Partners to Acquire 52.47% Stake in Aavas Financiers from Promoters

In a significant financial sector development, CVC Capital Partners, a global private equity giant, has announced a major acquisition in India. The firm is set to take control of Aavas Financiers, a leading non-banking financial company (NBFC) specializing in affordable housing loans. This acquisition not only marks a milestone for CVC Capital but also highlights the growing interest in India’s expanding housing finance market.

Acquisition Details: A Landmark Transaction

CVC Capital has secured a 26.47% stake in Aavas Financiers from its existing shareholders, Kedaara Capital and Partners Group, at a transaction value of Rs. 3,425 crore. This deal values Aavas Financiers at approximately Rs. 13,020 crore. Following this acquisition, CVC Capital launched an open offer to acquire an additional 26% stake from public shareholders at Rs. 1,767 per share. If fully accepted, this offer will increase the transaction’s total value to Rs. 7,089 crore, making it one of the largest in the sector. The acquisition signifies a change in control, positioning CVC as a significant player in India’s housing finance sector.

Aavas Financiers: Financials

Aavas Financiers, founded in 2012, has established itself as a key provider of affordable housing loans, particularly targeting low- and middle-income customers in semi-urban and rural areas. Operating across 13 states with 371 branches, the company has shown consistent growth. For the quarter ending June 2024, Aavas reported a net profit of Rs. 126.10 crore, reflecting its strong financial performance. The company’s assets under management (AUM) stood at Rs. 17,841 crore, with plans to grow by 20-25% annually. The acquisition by CVC Capital is expected to further enhance Aavas’s growth trajectory, leveraging CVC’s extensive experience in the financial sector.

Conclusion: CVC Capital’s acquisition of Aavas Financiers is a significant move in the Indian financial landscape. This deal not only underscores the attractiveness of the Indian housing finance sector but also positions CVC Capital as a key player in this growing market. As Aavas Financiers continues to expand, backed by CVC’s global expertise, the company is well-positioned to capitalize on the increasing demand for affordable housing finance in India.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.