Rs 2 Billion Boost: Aavas Financiers’ NCD Move Signals Confidence and Expansion

Aavas Financiers Ltd, a leading housing finance company in the non-banking sector, has cleared the issue of non-convertible debentures (NCDs) aggregating to Rs 2 billion as part of its on-going strategy of building its funding base and complementing business growth. The initiative follows a spate of recent issues of NCDs by the company that evidences strong demand for debt instruments in the prevailing market conditions.

 

The approval of the board permits Aavas Financiers to issue senior, secured, rated, listed, transferable, and redeemable NCDs on a private placement basis. The NCDs are to be denominated in rupees and are likely to be listed on the Wholesale Debt Market segment of the BSE, offering liquidity and transparency to the investors. The instruments have a tenor ranging up to five years, while interest payments are arranged on a floating rate basis, reference to the Mumbai Inter-Bank Outright Rate-OIS for a six-month tenor.

 

The proceeds of this issue will be utilized to finance the company's core business of offering affordable housing loans, with a focus on low- and middle-income customers in semi-urban and rural geographies in 14 states. This infusion of capital will enable Aavas Financiers to sustain its growth trajectory, diversify its sources of funding, and continue to provide competitive loan products.

 

The proactive strategy of the company towards raising capital signifies its focus towards financial stability and growth in India's booming housing finance industry.

 

Source: CNBC-TV18, Business Standard, Tickertape