Aavas Financiers hits new high, zooms 116% thus far in 2019

Shares of Aavas Financiers hit a new all-time high of Rs 1,840, up 8 per cent on the BSE on Tuesday, thus zooming more than 100 per cent so far in the calendar year 2019 (CY19), on the back of strong financial performance and sustained buying by foreign portfolio investors (FPIs).

Share price of the company has surged 116 per cent from Rs 851 on the BSE. Aavas Financiers is the fourth most value creators among the S&P BSE 500 index in CY19. In comparison, the benchmark S&P BSE Sensex has gained 13 per cent during the same period.

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 increased their holdings by 650 basis points (bps) from 11.56 cent as on December 2018.

Aavas Financiers has posted 85.6 per cent year-on-year (YoY) jump in net profit at Rs 121 crore during 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) rose 42 per cent to Rs 6,753 crore from Rs 4,759 crore.

The management said the AUM growth will be 25 per cent CAGR and will look to open around 40-50 branches. Around 6 branches have been opened in first half but will open around 40 branches in total by the year-end.

The Reserve Bank of India (RBI) in October monetary policy had increased the household income and lending limit for non-banking finance company (NBFC) and microfinance (MFIs) borrowers.

The RBI increased the ceiling for a bank’s exposure to a single NBFC from 15 per cent to 20 per cent of its Tier 1 capital. The bank lending to NBFCs/HFCs for on-lending to housing up to Rs 20 lakh per borrower will be classified as priority sector lending.

Aavas is a retail-focused affordable housing finance company, primarily serving low and middle-income self-employed customers. The company's product offering consists of home loans for purchase or construction or residential properties, and for the extension and repair of existing housing units.