Aavas Financiers: A Leader in Affordable Housing Finance in India

Ashish Kila of Perfect Group presented his in-depth investment thesis on AAVAS Financiers (India: AAVAS) at Best Ideas 2025.

Thesis summary:

AAVAS Financiers is a business that has existed for many years and is similarly expected to last for years to come. The company is in the affordable housing finance industry, which is a long-standing sector in India. The Indian affordable housing finance industry is projected to grow significantly.

The company is a leading player in India in its segment. AAVAS is an affordable housing finance company (HFC) with a focus on providing loans to self-employed individuals and customers with weaker income documents. It has a niche market in small towns and semi-urban areas. AAVAS has disbursed more than ₹27,000 crores over the last 10 years while maintaining a low non-performing assets (NPA) rate. The company has already opened 372 branches and is actively expanding its geographical reach, particularly in southern India, and aims to increase its branch network from 372 to 600 within the next 3-4 years. With mortgage penetration in India at just 12.3% of GDP, there is significant room for growth in the affordable housing finance sector. AAVAS is well-positioned to capitalize on this opportunity and has ambitious plans to expand its reach by opening 30-35 new branches annually, ensuring sustained growth for decades to come.

AAVAS utilizes a low-cost operational model, which contributes to lower borrowing costs compared to its peers. The company is also leveraging technology to enhance efficiency, reduce loan processing times, and decrease employee costs. AAVAS has reduced the turnaround time (TAT) for loan sanctions from 9 to 6 days using tech. The company also uses a centralized model for core functions, such as lead generation, risk management, and collections.

The company places a strong emphasis on ethics, honesty, and integrity as core values driving its operations. Additionally, the investment by CVC Capital Partners highlights confidence in the company’s growth potential, backed by CVC’s proven track record of successful turnarounds. Notably, the company is currently trading at valuations lower than its pre-COVID levels, presenting an attractive investment opportunity.

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About the instructor:

Ashish Kila is a rank holder CA and MBA from MDI Gurgaon. He has worked with leading investment banks like Goldman Sachs & Morgan Stanley in their equity research division and now is the Director at Perfect Group. Ashish looks after the strategic functions of the group and manages the family office fund. Ashish is a regular speaker at NewsX, Bloomberg Quint Prime Spaces and contributes articles for newspapers like Business Standard and magazines like Money Today and sites like MoneyControl. Ashish has over the years conducted seminars on value investing, leadership, productivity and startups (angel investing) in prominent institutions like IIM (Calcutta, Indore), ISB (Hyderabad, Mohali), MDI Gurgaon, IBS Gurgaon, SSCBS, DSE, etc; forums like Octoberquest, MOI Global, CFA Society India; institutional firms like Fidelity, BNP Paribas MF, SBI MF, BOI AXA MF, Ambit House. Ashish & his family undertake several social initiatives via the group’s NGO – Perfect Foundation. The family is also actively involved with Bhaorao Deoras Sewa Nyas & is helping manage its two projects, Feeding 2000 people everyday free of cost where >45 lakh people have benefitted & Managing charitable patient attendant facilities across various hospitals in India i.e.~280 bed AIIMS Trauma Delhi, ~250 bed facility IGIMS, Patna , 300 bed near KGMC Lucknow and 800 bed AIIMS Jhajjar where >1 lakh people have benefited.

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