NCLT admits Aviom India Housing Finance into bankruptcy on RBI’s plea #IndiaFinance

The Delhi insolvency court on Thursday admitted Aviom India Housing Finance Pvt. Ltd into bankruptcy and liquidation proceedings following a plea by the Reserve Bank of India (RBI).

RBI had moved the National Company Law Tribunal (NCLT) under the Financial Service Providers (FSP) Insolvency Rules, 2019, leading to an interim moratorium that restricts legal proceedings, asset transfers, and recovery actions against the company. However, the supply of essential goods and services will not be disrupted during this period.

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Under the 2019 guidelines, only a regulator can refer a financial services provider to the bankruptcy tribunal. Instead of a traditional insolvency resolution professional, an administrator—nominated by the regulator and appointed by the tribunal—takes over the company’s management.

This development follows RBI’s intervention on 27 January, when it superseded the board of Aviom India Housing Finance, citing governance concerns and defaults on various payment obligations. The regulator exercised its powers under Section 45-IE(1) of the Reserve Bank of India Act based on the recommendation of the National Housing Bank (NHB).

The RBI has appointed Ram Kumar, former chief general manager of Punjab National Bank (PNB), as the administrator of Aviom India Housing Finance.

The regulatory action came two months after the lender received a notice from its statutory auditors, flagging potential discrepancies in its financial records following a complaint alleging irregularities and fraud.

In a November 2024 statement, Aviom India Housing Finance admitted it had discovered fraud within the company and had filed a complaint with the Economic Offences Wing (EOW). It also acknowledged liquidity issues and anticipated delays in interest payments.

Founded in 2016 by Kajal Ilmi, Aviom India Housing Finance is based in New Delhi and had a loan book of ₹1,752.4 crore as of 31 March 2024, up from ₹1,034.9 crore a year earlier, according to rating agency Icra Ltd.

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Aviom India Housing Finance is backed by several major lenders, including Utkarsh Small Finance Bank, HDFC Bank, Suryoday Small Finance Bank, LIC Housing Finance, and State Bank of India.

Ilmi serves as managing director and CEO, and according to her LinkedIn profile, has worked with PVR, DLF, and other companies.

On 28 November 2024, Crisil Ratings downgraded Aviom’s long-term rating on its bank facilities and non-convertible debentures (NCDs) from ‘Crisil C’ to ‘Crisil D’, citing delays in repaying a term loan facility due on November 25, 2024. A lender verbally confirmed the delay to Crisil on 27 November 2024.

In FY24, the company reported a net profit of ₹42.5 crore, with revenue at ₹416.8 crore. Sanctioned loans totalled ₹1,477.3 crore, compared to ₹589.2 crore in FY23.

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The development mirrors RBI’s 2019 intervention in Dewan Housing Finance Corp. Ltd (DHFL), where the central bank superseded the board and referred the company to NCLT following governance failures and financial mismanagement.