Aavas Financiers , a leading affordable housing finance company, has reported a strong financial performance for the second quarter of fiscal year 2026 (Q2FY26), demonstrating resilience in a challenging market environment.

Key Financial Highlights

Improved Asset Quality and Operational Efficiency

Aavas Financiers maintained strong asset quality metrics in Q2FY26:

Expansion and Growth Strategy

The company has made significant strides in its expansion plans:

• Entered Tamil Nadu market with eight new branches
• Plans to add 20-25 branches in the second half of FY26
• Targeting to reach 405 branches across 14 states by the end of FY26

Management Commentary

Sachinder Bhinder, Managing Director and CEO of Aavas Financiers, commented on the results: "We have regained healthy momentum, delivering 36% quarter-on-quarter and 21% year-on-year growth in disbursements. With the second half being seasonally strong for us, we are working towards taking our monthly disbursement run rate to ₹700 crores plus."

Ghanshyam Rawat, CFO, added: "Our incremental cost of borrowing is almost 60 basis points better than last year, which is converting into better spreads."

Future Outlook

Aavas Financiers has set a target of reaching an AUM of ₹55,000 crores by FY30, implying a CAGR of approximately 23% from current levels. The company plans to achieve this through:

1. Geographic expansion into new states
2. Employee productivity enhancement
3. Investment in technology and sourcing channels

Conclusion

Aavas Financiers' Q2FY26 results demonstrate the company's ability to navigate challenging market conditions while maintaining strong growth and asset quality. With its strategic expansion plans and focus on operational efficiency, the company appears well-positioned to capitalize on the growing demand in the affordable housing finance sector.

Aavas Financiers Limited , a retail-focused affordable housing finance company, has announced a significant employee stock option grant across three of its equity-based incentive plans. The Nomination and Remuneration Committee of the company's Board of Directors approved the issuance of a total of 17,33,700 stock options to eligible employees on November 11, 2025.

Breakdown of Stock Option Grants

The stock options were distributed across three different schemes:

Vesting Schedules

The granted options come with varying vesting schedules:

• ESOP-2022 and ESOP-2025: These plans follow a five-year vesting schedule, with 20% of the granted options vesting each year on the anniversary of the grant date.
• PSOP-2024: This plan has a four-year vesting schedule, with 25% of the options vesting each year.

Exercise Periods

The exercise periods for the vested options are as follows:

• ESOP-2022 and PSOP-2024: Vested options can be exercised within four years from each vesting date.
• ESOP-2025: Vested options have a longer exercise period of five years from each vesting date.

Compliance and Regulatory Aspects

Aavas Financiers confirmed that all three schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The company has not disclosed the pricing formula for these options, stating it is "As defined in the respective Scheme."

Impact and Significance

Employee stock option plans are often used as a tool for aligning employee interests with those of the company and its shareholders. By granting a substantial number of stock options, Aavas Financiers is likely aiming to:

1. Enhance employee retention, particularly for key talent
2. Motivate staff to contribute to the company's long-term growth and profitability
3. Create a sense of ownership among employees

The differentiated structure of the three plans, particularly the inclusion of a performance-based plan (PSOP-2024), suggests a strategic approach to reward and incentivize various levels or categories of employees.

As of the grant date, no options have been exercised, and consequently, there has been no immediate impact on the company's share capital or earnings per share. The potential dilution effect will only materialize as employees exercise their options over the coming years, subject to vesting conditions and exercise decisions.

Aavas Financiers' stock option grant comes at a time when the company continues to expand its presence in the affordable housing finance sector. The substantial number of options granted may indicate the company's confidence in its growth trajectory and its commitment to retaining and motivating its workforce in a competitive market.

Investors and market analysts will likely monitor the uptake and exercise of these options over time, as it could provide insights into employee confidence and the alignment of interests between the company's staff and its shareholders.