RBI Takes Over Aviom India Housing Finance; Insolvency Proceedings to Begin
The Reserve Bank of India (RBI) has suspended the board of Aviom India Housing Finance due to governance issues and payment defaults. The company, led by Ms. Kajal Ilmi, has been facing significant challenges, leading to this regulatory intervention.
RbiAviom India Housing FinanceGovernance ConcernsInsolvency ProceedingsReal EstateReal EstateJan 27, 2025
This action was taken under Section 45-IE(1) of the Reserve Bank of India Act, 1934, following a recommendation from the National Housing Bank (NHB).
Shri Ram Kumar, a former Chief General Manager (CGM) of Punjab National Bank, has been appointed as the Administrator under Section 45-IE(2) of the RBI Act.
The RBI has announced its intention to initiate the resolution process for the company under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019.
The central bank also plans to apply to the National Company Law Tribunal (NCLT), New Delhi, for appointing the Administrator as the Insolvency Resolution Professional.
Founded in August 2016, Aviom India Housing Finance is a Delhi-based housing finance company with a focus on providing loans for sanitation, home extension, home improvement, construction, and loan against property (LAP) to low-income families, primarily women.
The company operates in underserved segments of the market, targeting customers from the informal sector with self-occupied residential properties as collateral.
As of March 31, 2024, the company operated 268 branches across 13 states, with Madhya Pradesh and Uttar Pradesh accounting for 50% of its portfolio.
Aviom’s Assets Under Management (AUM) stood at ₹1,752 crore in FY24, with 78% comprising home loans and 22% LAP.
The company grew its AUM at a compound annual growth rate (CAGR) of 55.6% between FY21 and FY24.
The company is led by Ms.
Kajal Ilmi, who has over two decades of experience in real estate and housing.
Ms.
Ilmi and her family hold a 31.4% stake in Aviom, while key institutional investors include Gojo and Company Inc, SABRE Partners AIF Trust, Capital 4 Development Asia Fund Cooperative UA, and Teachers Insurance and Annuity Association of America (TIAA).
In FY24, Aviom raised ₹331 crore through equity and compulsory convertible preference shares, with ₹75 crore infused during the fiscal year.
This increased its equity capital base to ₹400 crore from ₹286 crore in FY23.
Despite its rapid growth and niche market positioning, Aviom faced governance challenges and failed to meet its payment obligations.
This prompted the RBI to intervene and take control of the company’s operations.
The resolution process, expected to be overseen by the NCLT, will determine the company’s future.
This development marks a crucial step in addressing governance and financial challenges in the housing finance sector, underscoring the RBI’s commitment to ensuring financial stability and protecting stakeholders.
Frequently Asked Questions
Why did the RBI suspend the board of Aviom India Housing Finance?
The RBI suspended the board due to governance concerns and payment defaults, as recommended by the National Housing Bank (NHB).
Who has been appointed as the Administrator of Aviom India Housing Finance?
Shri Ram Kumar, a former Chief General Manager (CGM) of Punjab National Bank, has been appointed as the Administrator.
What is the current status of Aviom India Housing Finance's Assets Under Management (AUM)?
As of March 31, 2024, Aviom’s AUM stood at ₹1,752 crore, with 78% comprising home loans and 22% loan against property (LAP).
Who leads Aviom India Housing Finance and what is their stake in the company?
Ms. Kajal Ilmi, with over two decades of experience in real estate and housing, leads the company. She and her family hold a 31.4% stake in Aviom.
What is the next step in the resolution process for Aviom India Housing Finance?
The RBI plans to apply to the National Company Law Tribunal (NCLT), New Delhi, for appointing the Administrator as the Insolvency Resolution Professional.
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