Aviom Housing Finance Rocked! Promoter's Rs 1385 Cr Rescue Plan vs. 6 Fierce Takeover Bids – Who Will Claim the Prize?

Author

Akshat Lakshkar | Whalesbook News Team

Detailed Coverage:

Kajal Ilmi, the promoter of Aviom India Housing Finance, has put forth a settlement proposal to the company's lenders, offering to clear Rs 1,385 crore in outstanding dues along with accrued interest over 26 months. The plan includes an upfront payment of Rs 350 crore and repayment of accrued interest in the subsequent 24 months. Ilmi also committed to fully repaying Rs 2.9 crore owed to operational creditors and employees. Her proposal suggests the appointment of a professional CEO and five directors, including two lender nominees, to manage the company during the repayment period.

However, lenders appear unlikely to accept the proposal. Officials cited allegations of fund siphoning, reportedly substantiated by a forensic audit commissioned by the lenders, which makes Ilmi unlikely to meet the "fit-and-proper" criteria.

Aviom India Housing Finance is currently undergoing insolvency proceedings initiated by the Reserve Bank of India. Amidst this, six entities have submitted takeover bids. Unity Small Finance Bank is reportedly the frontrunner, having offered an upfront cash payment of Rs 775 crore. Other interested parties include Authum Investment & Infrastructure, Northern ARC, DMI Housing, KIFS Housing Finance, and Areion Group. The Committee of Creditors is expected to convene soon to evaluate these bids, with PwC appointed to assess their commercial viability. Ilmi maintains that Aviom's prospects remain strong if the settlement is approved without lender haircuts.

**Impact** This news has a direct impact on the Indian financial services sector, specifically concerning resolution of stressed assets, corporate governance, and potential consolidation within the housing finance and non-banking financial company (NBFC) space. It affects investor sentiment towards companies undergoing insolvency and the broader lending landscape in India.

**Definitions** * **Insolvency proceedings**: The legal process for companies that cannot repay their debts, which can lead to liquidation or restructuring. * **Promoter**: The founder or original owner of a company, often holding a significant stake. * **Lenders**: Financial institutions or individuals who have lent money to the company. * **RBI-initiated insolvency proceedings**: A legal process started by the central bank for companies unable to pay debts. * **Upfront payment**: Initial payment made at the beginning of a transaction. * **Operational creditors**: Suppliers or service providers owed money for goods or services rendered. * **Forensic audit**: A detailed investigation into financial records to detect fraud or financial irregularities. * **Fit-and-proper criteria**: Standards used by regulators to assess the suitability of individuals or entities to operate in regulated financial sectors. * **Committee of Creditors (CoC)**: A group of lenders responsible for overseeing the resolution process of a company in insolvency. * **NBFC**: Non-Banking Financial Company. A financial institution providing bank-like services without a banking license. * **Impact investor-backed**: A company or fund investing with a goal of positive social/environmental impact alongside financial returns.