Aavas Financiers Limited , a leading affordable housing finance company, has reported a robust performance for the first quarter, with significant growth in key financial metrics despite a transition in its disbursement recognition model.

Strong AUM Growth and Improved Profitability

The company's Assets Under Management (AUM) grew by 16% year-on-year to Rs 207.00 billion. This growth was accompanied by a 10% increase in net profit, which reached Rs 1.40 billion. Net Interest Income also saw a healthy rise of 16% compared to the same quarter last year.

Enhanced Margins and Spreads

Aavas Financiers demonstrated improved financial efficiency with its spread expanding by 22 basis points quarter-on-quarter to 5.11%. The Net Interest Margin (NIM) also showed positive momentum, increasing by 16 basis points to 7.48%.

Disbursements and Operational Changes

The company reported disbursements of Rs 11.50 billion for the quarter. However, it's important to note that Aavas has transitioned to a realization-based model for disbursement recognition. This change led to a decline in the sanction-to-disbursement conversion ratio by approximately 10% to less than 75%. The company expects this to normalize in the coming quarters.

Asset Quality

While there was a slight uptick in asset quality metrics, they remained within manageable levels. Gross Non-Performing Assets (GNPA) stood at 1.22%, while Net Non-Performing Assets (NNPA) were at 0.84%. The 1+ Days Past Due (DPD) was reported at 4.15%.

Geographical Expansion and Digital Initiatives

Aavas is expanding its presence in Tamil Nadu with plans to open 10 new branches. The company has also partnered with digital platforms including CSC, eMitra, and India Post Payment Bank to enhance its reach and efficiency.

Future Outlook

Management expects AUM growth to be in the range of 18-20% and targets 20-25% growth in the future. The company remains focused on maintaining asset quality while pursuing growth opportunities.

Earnings Conference Call Highlights

In the earnings conference call, Aavas Financiers' management provided additional insights:

• The company has successfully concluded a change in the promoter process, welcoming CVC Capital Partners as a new promoter.
• Aavas has received a fresh sanction from the National Housing Bank after a gap of one year, completing a drawdown of Rs 2.00 billion in the quarter.
• The cost of borrowing declined by 22 basis points quarter-on-quarter to 8.02%, driven by proactive liability management and repricing benefits.
• The company maintains a strong capital position with a net worth of Rs 45.10 billion and a capital to risk-weighted assets ratio (CRAR) of 43.2%.

Aavas Financiers continues to demonstrate resilience and growth in the affordable housing finance sector, leveraging its strong operational capabilities and strategic initiatives to drive sustainable performance.

Aavas Financiers Limited, a prominent player in the financial sector, has made significant announcements regarding its employee stock option plan and upcoming annual general meeting. The company's board of directors has approved a new employee stock option plan and scheduled its annual general meeting, signaling important developments for shareholders and employees alike.

ESOP-2025 Plan Approval

The Board of Directors of Aavas Financiers Limited has given its nod to the "Aavas Financiers Limited-Equity Stock Option Plan for Employees- 2025" (ESOP-2025). This new plan allows for the issuance of up to 23,74,191 equity shares, each with a face value of Rs. 10.00. The ESOP-2025 is designed to benefit eligible employees of the company.

Key features of the ESOP-2025 plan include:

• The options will be granted in one or more tranches, as determined by the Board of Directors, including the Nomination and Remuneration Committee.
• The plan is subject to shareholder approval, in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Section 62 of the Companies Act, 2013.
• Employees will have a window of 5 years from each vesting date to exercise their options.

Annual General Meeting Announcement

Aavas Financiers has also set the date for its 15th Annual General Meeting (AGM). The key details are as follows:

The company will distribute the AGM notice and the annual report for the financial year 2024-25 electronically to shareholders whose email addresses are registered with the company, its Registrar & Share Transfer Agents, or their respective Depository Participants.

Additional Information

The board meeting where these decisions were made commenced at 10:06 AM and concluded at 10:15 AM on August 18, 2025. Aavas Financiers has assured that all relevant information will be available on the company's website under the investor relations section.

These developments underscore Aavas Financiers' commitment to employee engagement through equity participation and maintaining transparent communication with its shareholders. The ESOP-2025 plan aligns with industry practices of using stock options as a tool for employee retention and motivation.