Buyout group EQT is close to acquiring affordable housing finance company Aavas Financiers Ltd for ₹7,000 crore. This deal comes as current owners, Kedaara Capital and Partners Group, are looking to exit their eight-year investment. EQT is competing with CVC Capital Partners and Bain Capital, with final offers expected in early August.
Kedaara and Partners Group currently own 26.47% of Aavas, and their exit will trigger an open offer to buy an additional 26% from public shareholders, leading to a potential ₹6,976 crore buyout. This would be the largest deal in the sector, surpassing Warburg Pincus’s acquisition of Shriram Finance in May.
Aavas Financiers, which started in Rajasthan, has grown significantly, managing assets worth ₹17,313 crore as of FY24. The company has 367 branches across 13 states and recorded a profit of ₹491 crore on revenue of ₹2,020 crore in FY24. Despite challenges, including the departure of CEO Sushil Kumar Agarwal, Aavas has maintained a strong performance.
The company’s funding remains stable, with relationships with major banks, and support from organizations like the National Housing Bank, International Finance Corp., and the Asian Development Bank. However, its focus on low- and middle-income self-employed borrowers makes it vulnerable to economic cycles.
Industry analysts expect Aavas to continue growing, with a projected asset growth rate of 22-23% over FY26-27. The affordable housing finance sector remains attractive to private equity, with strong interest from firms like Blackstone, TPG, and GIC of Singapore.
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