Aavas Financiers rallies 90% so far in 2019 on FPI buying

Foreign portfolio investor stake in the company has increased to 16.57 per cent as on June 30, 2019, against 11.56 per cent at the end of December 2018 quarter.

Shares of Aavas Financiers continued their northward journey on Monday as it scaled a new high of Rs 1,622 apiece. The stock has surged over 90 per cent thus far in the calendar year 2019 (CY19) on strong foreign portfolio investors (FPIs) buying.

Thus far in CY19, the stock has rallied 93 per cent, as compared to a 4 per cent rise in the benchmark S&P BSE Sensex. Aavas Financiers is a retail affordable housing finance company primarily serving low and middle income self employed customers in semi-urban and rural areas in India.

FPIs increased their stake in Aavas Financiers by more than 5 percentage points to 16.57 per cent till June 30, 2019, according to shareholding pattern filed by the company. They held 11.56 per cent stake as on December 2018, and 13.13 per cent holding at the end of March 2019 quarter.

However, mutual funds and individual shareholders reduced their stake in Aavas Financiers for the second quarter in a row. Their combined holding in the company as on June 2019 stood at 16.26 per cent against 20.73 per cent at the end of December quarter.

Shares of Aavas Financiers listed on the bourses on October 8, 2018. The share price has more-than-doubled from level of Rs 773, against an 8 per cent rise in the benchmark index during the same period. The company had raised Rs 1,734 crore through initial public offer (IPO) by issuing shares at a price of Rs 821 per share.

Aavas Financiers has been able to maintain a comfortable level of asset quality, given the strong control systems, low Loan-To-Value (LTV) ratio and adequate collateral. As of June 30, 2019, the gross non-performing asset ratio and net NPA stood at 0.58 per cent and 0.48 per cent respectively, maintained below 1 per cent.

"The Company has put in place adequate credit appraisal mechanisms and integrated MIS systems. The company has enhanced its risk management system with the use of technology and analytics, which has resulted in better operating efficiencies, effective monitoring of collections and an improving trend of asset quality," according to CARE Ratings.