The stock has been the second-highest value creator among the S&P BSE500 stocks, zooming 132 per cent in calendar year 2019. In comparison, the benchmark S&P BSE Sensex was up 15 per cent during the year.
A sharp rally in the housing finance company has been attributed to strong earnings and foreign portfolio investors' (FPI) interest in the stock. FPIs' stake in Aavas Financiers stood at the highest level at 18.07 per cent at the end of September 30, 2019. Thus far in CY19, they have increased their holdings by 650 basis points (bps) from 11.56 cent as on December 2018.
Aavas Financiers had posted an 85.6 per cent year-on-year (YoY) jump in net profit at Rs 121 crore during the first half (April-September) of the financial year 2019-20. Net interest income (NII) during the period grew 39 per cent at Rs 251 crore on YoY basis. In the past one year, the company’s assets under management (AUM) have risen 42 per cent to Rs 6,753 crore from Rs 4,759 crore.
Earlier this month, the company's board of directors approved fundraising of up to Rs 460 crore though non-convertible debenture (NCDs) on private placement basis. Credit rating agency CARE Ratings assigned CARE double A minus rating for NCDs with stable outlook.
“The rating derives strength from healthy profitability metrics with RoTA (Return on total assets) at 3.64 per cent in FY19, adequate risk management & control systems put in place by the company as well as good growth opportunities in the affordable housing segment,” CARE Ratings said in rating rational.
“Owing to its strong credit appraisal mechanisms, Aavas Financiers has been able to keep its asset quality under control with GNPA and NNPA at 0.62 per cent and 0.49 per cent respectively as on September 30, 2019. Also, the granular nature of the company’s loan book with more than 99 per cent loans to retail individuals mitigates the credit risk to some extent,” it said.