Key Takeaways
- • CVC Capital Partners acquired a 26.47% stake in Aavas Financiers from Kedaara Capital and Partners Group for INR 34.25bn (approximately USD 400m), completing Partners Group's full exit from the Indian affordable housing finance company after a nine-year investment period.
- • Partners Group realized approximately INR 35bn (USD 407m) in total proceeds over seven years, achieving a 6x return on its original INR 9.5bn investment made in 2016 alongside Kedaara Capital, demonstrating strong value creation in India's affordable housing finance sector.
- • CVC launched an open offer to acquire an additional 26% stake from public shareholders at INR 1,635 per share, positioning itself to achieve controlling ownership of 52.47% and making this the largest-ever acquisition in India's affordable housing finance sector, valued at approximately INR 7,089 crore (USD 850m+) if fully subscribed.
- • Aavas Financiers operates 397 branches across 14 Indian states, serves unbanked and informal income segments with average loan accounts of USD 11,000, and reported FY25 assets under management of INR 204bn with net profit of INR 5.74bn, establishing its position as a market leader in low- and middle-income housing finance.
- • The transaction reflects consolidation in India's fast-growing affordable housing finance sector, with CVC outbidding EQT and Bain Capital to secure the asset, signaling institutional appetite for regulated NBFC platforms targeting underserved Indian markets.
Summary
CVC Capital Partners has completed its acquisition of a 26.47% stake in Aavas Financiers from co-promoters Kedaara Capital and Partners Group for INR 34.25bn, marking Partners Group's full exit from the Indian affordable housing finance company. The transaction represents a significant milestone in India's private equity-backed NBFC consolidation, with CVC emerging as the winning bidder ahead of competitors EQT and Bain Capital.
Partners Group's divestment concludes a nine-year investment cycle that began in 2016 when the firm and Kedaara Capital jointly acquired a 90.1% stake in Aavas for INR 9.5bn. The investor has since realized approximately INR 35bn (USD 407m) in total proceeds, representing a 6x return on its original capital deployment. Following the company's 2018 public listing on the BSE and National Stock Exchange of India, Partners Group executed a series of secondary market sales, including block deals worth INR 15.89bn in 2021, before completing its remaining 10.87% stake exit to CVC for INR 14.1bn.
CVC's acquisition extends beyond the initial 26.47% stake purchase. The European private equity firm has launched a mandatory open offer to acquire an additional 26% from public shareholders at INR 1,635 per share, a modest discount to the Friday closing price of INR 1,645. If fully subscribed, CVC will acquire controlling ownership of 52.47% and deploy approximately INR 7,089 crore (USD 850m+), establishing this as the largest-ever acquisition in India's affordable housing finance sector, surpassing Warburg Pincus' May 2025 acquisition of Shriram Finance.
Aavas Financiers operates as a market leader in affordable housing finance, serving unbanked and informal income customer segments through a retail network of 397 branches across 14 Indian states and union territories. The company reported FY25 assets under management of INR 204bn and net profit of INR 5.74bn, providing home loans, home construction loans, loans against properties, home improvement loans, and business loans with average loan account sizes of approximately USD 11,000. Founded in 2011 as the home loan business of NBFC AU Financiers, the company navigated significant macro headwinds during Partners Group's tenure, including demonetization, liquidity crises, and the COVID-19 pandemic, while implementing transformational operational and strategic initiatives.
The transaction underscores institutional capital's strategic focus on India's high-growth affordable housing finance sector and consolidation within the NBFC ecosystem. CVC's control acquisition signals confidence in Aavas' market position and growth trajectory within underserved and underreached segments of India's credit markets, where regulatory maturation and penetration opportunity remain substantial for scaled, well-capitalized platforms.
Partners Group's divestment concludes a nine-year investment cycle that began in 2016 when the firm and Kedaara Capital jointly acquired a 90.1% stake in Aavas for INR 9.5bn. The investor has since realized approximately INR 35bn (USD 407m) in total proceeds, representing a 6x return on its original capital deployment. Following the company's 2018 public listing on the BSE and National Stock Exchange of India, Partners Group executed a series of secondary market sales, including block deals worth INR 15.89bn in 2021, before completing its remaining 10.87% stake exit to CVC for INR 14.1bn.
CVC's acquisition extends beyond the initial 26.47% stake purchase. The European private equity firm has launched a mandatory open offer to acquire an additional 26% from public shareholders at INR 1,635 per share, a modest discount to the Friday closing price of INR 1,645. If fully subscribed, CVC will acquire controlling ownership of 52.47% and deploy approximately INR 7,089 crore (USD 850m+), establishing this as the largest-ever acquisition in India's affordable housing finance sector, surpassing Warburg Pincus' May 2025 acquisition of Shriram Finance.
Aavas Financiers operates as a market leader in affordable housing finance, serving unbanked and informal income customer segments through a retail network of 397 branches across 14 Indian states and union territories. The company reported FY25 assets under management of INR 204bn and net profit of INR 5.74bn, providing home loans, home construction loans, loans against properties, home improvement loans, and business loans with average loan account sizes of approximately USD 11,000. Founded in 2011 as the home loan business of NBFC AU Financiers, the company navigated significant macro headwinds during Partners Group's tenure, including demonetization, liquidity crises, and the COVID-19 pandemic, while implementing transformational operational and strategic initiatives.
The transaction underscores institutional capital's strategic focus on India's high-growth affordable housing finance sector and consolidation within the NBFC ecosystem. CVC's control acquisition signals confidence in Aavas' market position and growth trajectory within underserved and underreached segments of India's credit markets, where regulatory maturation and penetration opportunity remain substantial for scaled, well-capitalized platforms.
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