PE-backed Aavas Financiers raises $29 mn from CDC via masala bonds
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Home-loan company Aavas Financiers Ltd has raised Rs 200 crore ($28.7 million) from UK government-owned development financial institution CDC Group Plc through its maiden masala bond issue.

Aavas, which is backed by investment firms Kedaara Capital and Partners Group, issued long-term bonds maturing in 2025 to CDC, it said in a statement. Masala bonds are rupee-denominated securities issued outside India.

Aavas’ bonds will be eligible for listing on London Stock Exchange or any other international stock exchange, the company said.

The development follows Aavas’ recent initial public offering in September. Aavas failed to garner full subscription in the IPO as concerns related to non-banking financial companies continued to hurt market sentiment.

Aavas also made a weak debut on the stock exchanges in early October.

Shares of Aavas on the BSE closed at Rs 843 a piece on Thursday, down 0.58% from previous close. Aavas went public with an IPO priced at Rs 821 apiece.

Jaipur-based Aavas, formerly AU Housing Finance Ltd, provides housing loans to low-income and middle-income segments in semi-urban and rural areas. The lender, incorporated in February 2011, started operations in March 2012.

In 2016, AU Financiers (India) Ltd (now AU Small Finance Bank), sold stake in its housing finance arm to a joint venture of Kedaara and Swiss investment firm Partners Group. Kedaara had also invested in Au Financiers in December 2014.

Aavas had disbursed a total of Rs 3,444 crore as of 31 March 2017, according to its annual report. 

Its loan book stood at Rs 4,759 crore with gross non-performing assets at 0.57% of the total loans made as on September-end. Capital adequacy ratio was 58.8% as on September-end.

Aavas, which has a network of 186 branches across 108 districts and 817 tehsils in eight states, claims to have extended loans to more than 75,000 customers as of September-end. 

Aavas joined a host of housing finance companies and non-banking financial companies in going public over the past two to three years. Names include microlender CreditAccess Grameen Ltd, IndoStar Capital Finance Ltd, and MAS Financial Services.

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