Partners Group, acting on behalf of its clients, has sold its final stake in Aavas Financiers, a specialist in affordable housing finance in India, to CVC Capital Partners, marking a full exit for the private equity firm and a strong return for its clients.
Founded in 2011, Aavas primarily focuses on unbanked and informal income segments of home buyers in India, with an average of around $11,000 per loan account. Aavas provides home loans, home construction loans, loans against properties, home improvement loans, and business loans to low- and middle-income salaried and self-employed customers in underserved and underreached markets in India. The company operates from 397 branches across 14 states and union territories.
Partners Group acquired a significant stake in Aavas in 2016 with the aim to create the first private equity-controlled housing finance company in India. Following two years of strong growth, Partners Group listed Aavas on BSE and the National Stock Exchange of India in 2018. Since the listing, Partners Group has been gradually selling down its shareholding.
During its holding period, Partners Group steered strategy and implemented several value creation initiatives at Aavas, while also guiding the company through multiple macro headwinds such as demonetisation, a liquidity crisis, and the impact of the Covid-19 pandemic.
Key value creation initiatives included strengthening the management team, adding new products, digitalising operations to lower processing times, improving customer experiences, and accelerating branch openings.
Since 2016, Aavas has seen its assets under management increase over 12x to more than INR204bn, cementing its position as a market leader in affordable housing finance in India. Additionally, the Company’s net income has risen around 18x to INR5.7bn and asset quality has improved over 165 bps to 3.4% of loans past due.
Partners Group has $78bn in private equity assets under management globally. The final stake sale in Aavas represents Partners Group’s second exit in India over the last year, following the listing and subsequent stake sale of Vishal Mega Mart, a leading retailer in the country, on BSE and the National Stock Exchange of India. Partners Group has invested $2.3bn in India since inception.
