CVC Capital Partners, the European private equity major, has won the race for Aavas Financiers (formerly AU Housing Finance) as it pipped rival EQT to the post.

It will acquire the entire promoters’ stake of 26.47 per cent from Kedaara Capital and Partners Group for ₹3,425 crore.

Since the acquisition will lead to a change in control, CVC has announced an open offer to acquire 26 per cent from public shareholders at ₹1,766.69 apiece.

If the open offer is fully subscribed, CVC would have to pay another ₹3,664 crore. The transaction (acquisition of the promoters stake) values Aavas at nearly ₹13,000 crore.

On Friday, the Aavas share closed at ₹1,645.15 on the BSE.

The deal, including the full acceptance of the open offer, is worth ₹7,089 crore the largest in the sector, overtaking Warburg Pincus’ transaction with Shriram Finance.

The latter had sold its housing finance subsidiary Shriram Housing Finance Ltd to Mango Crest Investment Ltd in a transaction valued at ₹4,630 crore for equity and convertible instruments of SHFL.

Aavas which started its operations in 2012, offers housing loans, primarily, to customers belonging to the low- and middle-income segments in semi-urban and rural areas.

According to the company’s website, it operates in 13 states with a total of 371 branches.

For the quarter ended June 30, 2024, it posted a net profit of ₹126.10 crore against ₹109.71 crore in the corresponding period of the previous year.

During this period, while its interest income grew from ₹412.82 crore to ₹479.75 crore, the total income was placed at ₹542.56 crore against ₹466.85 crore in the year-ago period.

Aavas was a subsidiary of AU Financiers (India), which sold its stake in 2016 to a joint venture of Kedaara Capital and Partners Group in a deal reportedly worth ₹950 crore.

In March this year, both the private equity players had divested 12.6 per cent in Aavas in the open market for ₹1,369 crore.

At a conference call after the results, the top management disclosed that at the end of the first quarter, its AUM (assets under management) stood at ₹17,841 crore, up 22 per cent, which aligned with its target to grow the AUM by 20-25 per cent.

Its incremental borrowing cost increased 30 basis points over the previous year and 17 basis points sequentially to 8.31 per cent.

It raised ₹1,135 crore at 8.31 per cent in the period. The total outstanding borrowing as of June 30, 2024 stood at ₹15,800 crore.