Overview – The Aviom India Housing Finance Private Limited Bond on Altifi

Details of the Corporate Bond:

• Name of the Issuer: Aviom India Housing Finance Private Limited
• Product: Senior secured bonds (regulated by SEBI)
• Yield: 12.25 p.a.
• Tenure: ~36 months
• Min Investment: ~Rs 1,00,000
• Interest repayment: Quarterly
• Principal repayment: Quarterly
• Rating: CRISIL BBB+

Key Highlights:

• Strong board and governance with the presence of four Nominee Directors representing Gojo & Company and Nuveen Asset Management
• Comfortable capitalization levels supported by equity raise of 175 crores in FY23 from Nuveen; Capital adequacy ratio at 24.8% as of H1FY24.
• The company’s credit rating was recently upgraded by both ICRA and CRISIL to BBB+ in FY24.
• Strong growth of 44% year on year in the AUM with a book size of 1275 crore in Sep’23 up from 885 crore in Sep’22.
• The entity maintained a stable portfolio quality with a PAR90 of 0.58% as of Sep’23.

Overview:

Aviom started operations in 2016 and is an affordable housing finance company catering to customers with undocumented informal income in urban and semi-urban areas. It operates in the segment between traditional housing finance institutions and microfinance lenders. It provides loans for sanitation, home extension, home improvement, construction and LAP to low-income families from the informal sector with a strong focus on women. The company has 166 branches spread across 12 states. The AUM of the entity (own and managed) stood at 1275 crore at H1FY24.

As of Sep’23, operations are spread across Rajasthan, Madhya Pradesh, Uttar Pradesh, Karnataka, Telangana, Andhra Pradesh and others. Rajasthan, Madhya Pradesh and Uttar Pradesh contributed around 66% of the portfolio. Aviom had a net worth of 306 crore as on Sep’23, with a gearing of 3.7x.

Promoter/ Management:

Kaajal Aijaz Ilmi: CEO& MD, Founder: Ms. Kaajal has experience across finance, real estate and entertainment industries. Prior to establishing Avion, she was the MD of Alchemist Realty and prior to that, she served as one of the three Group Presidents in Reliance ADAG for nearly 4 years handling Corporate Affairs and Corporate Communications. Earlier, she held positions across firms including as CEO-DT Cinemas, CEO- Emporio, DLF and Director-DLF services for nearly 11 years.

Amit Arora: Chief Financial Officer: Prior to joining Aviom, Amit had served 4 years as Deputy CFO at Hero Housing Finance. A CA professional with over 16 years of experience in Financial Reporting, Business Planning, Audit and Compliances, Process and Risk Control, People Management.

Key Financials:

All figures in INR crore

Aviom’s portfolio is comprised of 46% loans for repair and renovation, 28% for home construction or purchase and the balance (~26%) of LAP as of Sep23 with an average ticket size of ~INR 2 lakh. About 80% of the AUM consists of loans less than INR 3 lakhs in ticket size. In terms of tenure, around 71% of the book is over 7 years and 22% is of 5-7 years.

Lenders:

The prominent lenders to Aviom are:

Banks:

• HDFC Bank
• IDFC First Bank
• The Federal Bank
• Indusind Bank

NBFCs and FIs:

• Blue Orchard
• Northern Arc Capital
• Symbiotics
• Hinduja Housing Finance
• Poonawalla Finance

Disclaimer: The content of this blog should not be considered as financial or investment advice. Readers/Viewers may consult their financial advisor before any investment.