Aavas raises Rs 200 cr from UK's CDC group

Housing financier Aavas Thursday said it has raised Rs 200 crore from UK's CDC group by issuing masala bond.

Aavas Financiers (Aavas) has raised Rs 200 crore from CDC Group Plc (CDC), the United Kingdom's Development Finance Institution, through issuance of rupee denominated masala bonds, the company said in a release.

This is Aavas's maiden masala bond issue and can be listed on London Stock Exchange or any other international stock exchanges in future, it said.

A retail focused affordable housing finance company is primarily targeting low and middle-income self-employed customers in rural and semi-urban areas.

"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," said Sushil Kumar Agarwal, Whole Time Director and Chief Executive Officer, Aavas Financiers.

The company will continue to maintain its growth trajectory despite the industry currently facing headwinds, Agarwal said.

Chief Financial Officer Ghanshyam Rawat said the fund raised will enable Avas to benchmark a long-term debt instrument in international markets and help it mobilise additional funds through this route in future.

"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," said Srini Nagarajan, CDC Managing Director and Head of Asia.

This long-term investment commitment to Aavas especially in the current liquidity situation demonstrates CDC's commitment as a development finance institution with long-term patient capital, Nagarajan said.

The housing finance firm said customers in rural and semi-urban make up a large proportion of India's population but has a limited or no access to formal banking credit due to lack of credit score or proven credit history.

For half year ended 30th September 2018, the loan book of the company stood at Rs 4,759 crore.

Its gross NPAs stood at 0.57 per cent, capital adequacy ratio at 58.8 per cent and a healthy ROA (return on assets) of 3.06 per cent.

The company said it has extended more than 75,000 loans to its customers till September 2018. It has 186 branches spread across 108 districts.