Unity Small Finance Bank Leads Bid for Aviom India Housing Finance with Rs 775 Crore Offer

Unity Small Finance Bank is leading the race to acquire Aviom India Housing Finance, having submitted an upfront cash offer of Rs 775 crore. This acquisition is part of Aviom's corporate resolution process under the Insolvency and Bankruptcy Code (IBC). Other potential bidders include Authume Investment and Infrastructure Limited (offering Rs 750 crore with Rs 450 crore upfront), Northern Arc (Rs 625 crore with Rs 325 crore upfront), DMI Housing (Rs 400 crore upfront), Kifs Housing Finance (Rs 450 crore), and Omkara Asset Reconstruction Company (Rs 325 crore). The appeal of Aviom lies in its Rs 1,500 crore loan book, which is fully secured, and it holds over Rs 300 crore in cash with bad loans fully provided for. The housing finance sector is currently seeing significant interest from private equity investors, with recent deals like Blackstone acquiring a stake in Aadhar Housing Finance and Warburg Pincus in Shriram Housing Finance, enhancing Aviom's attractiveness. Experts suggest bids might cross Rs 1,000 crore. Aviom India Housing Finance entered corporate resolution after auditors flagged discrepancies and the National Housing Bank (NHB) found inflated mutual fund investments. It subsequently defaulted on loans and was admitted into IBC proceedings in February. The Reserve Bank of India-appointed resolution professional, Ram Kumar, will soon conduct a challenge auction among the six resolution applicants who submitted plans out of 18 expressions of interest. Impact: This acquisition could significantly boost Unity Small Finance Bank's loan book and market presence, while providing a resolution for Aviom's creditors. The process highlights the ongoing consolidation and investor interest in the affordable housing finance segment. Rating: 7/10. Difficult Terms: * Impact Investor: An investor who invests in companies, organizations, or funds with the intention to generate a measurable social or environmental impact alongside a financial return. * Corporate Resolution: The process of resolving a company's financial distress or failure, often under legal frameworks like the Insolvency and Bankruptcy Code. * Insolvency and Bankruptcy Code (IBC): A law in India that consolidates and amends the laws relating to insolvency, bankruptcy, and winding-up of entities to protect creditors and ensure timely resolution. * Resolution Professional (RP): An insolvency professional appointed by the National Company Law Tribunal (NCLT) to manage the resolution process of a corporate debtor under the IBC. * Loan Book: The total value of loans issued by a financial institution. * Bad Loans: Loans that are in default or near default and are unlikely to be repaid in full. * Challenge Auction: A process in IBC where a higher or better bid is presented to compete against an existing successful bid, aiming for the best possible resolution plan. * Amalgamated: Merged or combined into one entity.