Credit Rating

Ref No: AAVAS/SEC/2026-27/2844 Date: July 1,2026 To, To, The National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, Block G Phiroze Jeejeebhoy Bandra Kurla Complex Dalal Street Bandra (E) Mumbai – 400001 Mumbai – 400051 Scrip Symbol: AAVAS Scrip Code: 541988 Dear Sir/Madam, Subject: Intimation of Rating Action by ICRA Limited. Pursuant to Regulation 30(6) and 51 read with Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that ICRA Limited vide its letter dated June 30, 2026, has taken the following rating actions: Instrument Current Rated Amount Rating Action (Rs. In Cr.) Long term fund based – 3,398.00 [ICRA]AA; put on Rating Watch Bank lines with Developing Implications Non-convertible Debenture 800.00 [ICRA]AA; put on Rating Watch programme with Developing Implications Commercial Paper 250.00 [ICRA]A1+; outstanding Total 4,448.00 - A copy of the rating rationale issued by ICRA Limited is attached herewith. The above information will also be made available on the website of the Company and can be accessed at www.aavas.in You are requested to take the same on record. Date and time of occurrence of event/information: June 30, 2026 and 03:38 P.M. Thanking You, For AAVAS FINANCIERS LIMITED SAURABH SHARMA COMPANY SECRETARY & COMPLIANCE OFFICER (ACS-60350) INTERNAL June 30, 2026 Aavas Financiers Limited: Long-term rating put on Watch with Developing Implications Summary of rating action Previous rated amount Current rated amount Instrument* Rating action (Rs. crore) (Rs. crore) [ICRA]AA; put on Rating Watch with Long term fund based – Bank lines 3,398.00 3,398.00 Developing Implications [ICRA]AA; put on Rating Watch with Non-convertible debenture programme 800.00 800.00 Developing Implications Commercial paper 250.00 250.00 [ICRA]A1+; outstanding Total 4,448.00 4,448.00 *Instrument details are provided in Annexure II Rationale Aavas vide its stock exchange filing dated June 21, 2026, intimated about the resignation of Mr. Ghanshyam Rawat (President and Chief Financial Officer) and Mr. Ashutosh Atre (President and Chief Risk Officer) from their respective positions, with effect from September 21, 2026. Further, the company also intimated about the appointment of Mr. Ghanshyam Gupta as the Interim Chief Financial Officer, Key Managerial Personnel (KMP) of the company, with effect from June 22, 2026 and the appointment of Mr. Punit Purushottam Agarwal as the Interim Chief Risk Officer, Senior Management Personnel (SMP) of the company for a period of one year, with effect from June 22, 2026. Given the changes in the senior management team at Aavas over the past few months including exit of Chief Executive Officer (CEO) in April 2026, Chief Business Officer (CBO) in May 2026 and the changes in the current month as detailed above, ICRA has placed the ratings on watch with developing implications. ICRA will continue to closely monitor the impact of these developments on the business/ operations and fund raising by the company, at least over the near term and shall take appropriate actions as and when required. ICRA notes that Aavas has a strong liquidity characterised by sizeable on-balance sheet liquidity in the form of cash and liquid investments of about Rs. 2,114 crore (13% of its on-balance sheet borrowings) as on March 31, 2026 and undrawn cash credit limits of Rs. 101crore and unavailed sanctions of Rs. 975 crore from banks as on March 31, 2026. As on March 31, 2026, Aavas’ asset-liability management (ALM) profile reflected scheduled inflows (principal and interest) of Rs. 4,967 crore from performing advances during the next 12 months. This is sufficient compared to the total debt servicing burden (principal and interest) of about Rs. 3,956 crore over the one-year period till March 31, 2027. Please refer to the following link for the previous detailed rationale that captures Key rating drivers and their description, Liquidity position, Rating sensitivities, Environmental and social risks: Click here Analytical approach Analytical approach Comments Applicable rating methodologies ICRA’s Credit Rating Methodology for Non-banking Finance Companies Parent/Group support Not applicable Consolidation/Standalone Standalone About the company Aavas is a Jaipur (Rajasthan) headquartered housing finance company, which primarily provides housing loans in rural and semi-urban areas. It is present in 14 states and 1 UT, with a network of 435 branches and AUM of Rs. 23,452 crore as on March 31, 2026. www.icra .in 1 Sensitivity Label : Public Page | Aavas was incorporated as a subsidiary of Au Financiers (India) Limited {now Au Small Finance Bank Limited (AuSFB)} in February 2011, and it formally began its operations in March 2012. In June 2016, AuSFB sold its stake in Aavas to private equity (PE) investors – Kedaara Capital and Partners Group – to meet the Reserve Bank of India’s (RBI) criteria for conversion to a small finance bank. Aavas launched an initial public offering (IPO) in FY2019 and its equity shares got listed on the stock exchanges on October 8, 2018. The total issue size was Rs. 1,734 crore, of which ~Rs. 360 crore was raised for business operations while the rest was utilised to pay off the existing shareholders. In August 2024, the erstwhile promoter group, i.e. Kedaara Capital and Partners Group, entered into share sale agreements (SSAs) to sell their entire stake to Aquilo House Pte. Ltd., which belongs to CVC Capital Partners Group (acquirer). Subsequently, through a public announcement dated August 10, 2024, the acquirer made an open offer for the acquisition of an additional stake of up to 26.00% from the public shareholders of Aavas. After the consummation of the SSAs and completion of the open offer, Aquilo House Pte. Ltd. gained control and was categorised as the new promoter of Aavas. As on March 31, 2026, Aavas’ shareholding was: CVC Capital Partners (48.94%), domestic institutional investors (DIIs; 22.13%), foreign institutional investors (FIIs; 16.74%), the management team/employees/board members and relatives (1.11%) and others (11.08%). Aavas reported a profit after tax (PAT) of Rs. 655 crore in FY2026 on a managed asset base1 of Rs. 26,171 crore as on March 31, 2026 compared with PAT of Rs. 574 crore in FY2025 on a managed asset base of Rs. 22,926 crore as on March 31, 2025. It had a net worth of Rs. 5,051 crore and CRAR of 44.6% as on March 31, 2026 (Rs. 4,361 crore and 44.5%, respectively, as on March 31, 2025). The gross and net stage 3 stood at 1.0% and 0.7%, respectively, as on March 31, 2026 (1.1% and 0.7%, respectively, as on March 31, 2025). Key financial indicators Aavas FY2024 FY2025 FY2026 Audited Audited Audited Total income 2,020 2,358 2,685 PAT 491 574 655 Total managed assets 19,933 22,926 26,171 Return on average managed assets 2.7% 2.7% 2.7% Managed gearing (times) 4.2 4.2 4.1 Gross stage 3 0.9% 1.1% 1.0% CRAR 44.0% 44.5% 44.6% Source: Aavas’ financial results, ICRA Research; Note: Amount in Rs. crore; All figures and ratios are as per ICRA’s calculations/adjustments Status of non-cooperation with previous CRA: Not applicable Any other information: None 1 Managed assets = Gross assets (including credit provisions on loans) + Off-book portfolio www.icra .in 2 Sensitivity Label : Public Page | Rating history for past three years Current rating (FY2027) Chronology of rating history for the past 3 years FY2027 FY2026 FY2025 FY2024 Amount rated Instrument Type Jun 30, 2026 Date Rating Date Rating Date Rating (Rs crore) [ICRA]AA; Rating Watch Fund based – Long Apr 07, [ICRA]AA Jun 25, [ICRA]AA Jan 08, [ICRA]AA 3,398.00 with Developing Bank lines Term 2025 (Stable) 2024 (Stable) 2024 (Stable) Implications Jun 11, [ICRA]AA - - - - 2025 (Stable) Mar 13, [ICRA]AA - - - - 2026 (Positive) Non-convertible [ICRA]AA; Rating Watch Long Apr 07, [ICRA]AA Jun 25, [ICRA]AA Jan 08, [ICRA]AA debenture 800.00 with Developi [Showing first 8,000 characters — download PDF for full document]