The Delhi insolvency court has officially initiated bankruptcy and liquidation proceedings for Aviom India Housing Finance Pvt. Ltd, following a request from the Reserve Bank of India (RBI). The RBI approached the National Company Law Tribunal (NCLT) under the Financial Service Providers (FSP) Insolvency Rules, 2019, which resulted in an interim moratorium that halts legal actions, asset transfers, and recovery efforts against the company. However, the provision of essential goods and services will continue uninterrupted during this time.
According to the 2019 regulations, only a regulatory body can refer a financial services provider to the bankruptcy tribunal. In this case, an administrator appointed by the regulator, rather than a traditional insolvency resolution professional, will manage the company.
This action follows the RBI’s decision on January 27, when it took control of Aviom India Housing Finance’s board due to governance issues and defaults on various payments. The RBI acted under Section 45-IE(1) of the Reserve Bank of India Act, based on a recommendation from the National Housing Bank (NHB). Ram Kumar, the former chief general manager of Punjab National Bank, has been designated as the administrator for Aviom India Housing Finance.
The regulatory move came two months after the lender received a notice from its statutory auditors regarding potential discrepancies in its financial records, following a complaint about irregularities and fraud. In a statement from November 2024, Aviom India Housing Finance acknowledged the discovery of fraud within the company and reported it to the Economic Offences Wing (EOW). The company also recognized liquidity challenges and expected delays in interest payments.
Founded in 2016 by Kajal Ilmi, Aviom India Housing Finance is headquartered in New Delhi and had a loan portfolio of ₹1,752.4 crore as of March 31, 2024, an increase from ₹1,034.9 crore the previous year, according to Icra Ltd. The company is supported by several prominent lenders, including Utkarsh Small Finance Bank, HDFC Bank, Suryoday Small Finance Bank, LIC Housing Finance, and State Bank of India. Ilmi serves as the managing director and CEO and has previously worked with PVR, DLF, and other firms.
On November 28, 2024, Crisil Ratings downgraded Aviom’s long-term rating on its bank facilities and non-convertible debentures (NCDs) from ‘Crisil C’ to ‘Crisil D’ due to delays in repaying a term loan that was due on November 25, 2024. A lender confirmed the delay to Crisil on November 27, 2024. In FY24, the company reported a net profit of ₹42.5 crore, with revenues reaching ₹416.8 crore, and sanctioned loans totaling ₹1,477.3 crore, compared to ₹589.2 crore in FY23.
