Avanse Financial Services Files for ₹3,500 Crore IPO

21 Jun 2024 , 01:57 PM

Mumbai-based Avanse Financial Services, backed by Warburg Pincus, Kedaara Capital, and IFC, has submitted draft papers to SEBI for raising ₹3,500 crore through an initial public offering (IPO). This move could mark the first-ever listing of an education-focused non-banking financial company (NBFC) in India.

IPO Details

• Total Issue Size: ₹3,500 Crore
• Fresh Issue: ₹1,000 Crore
• Offer for Sale (OFS): ₹2,500 Crore by Warburg Pincus, Kedaara Capital, and IFC

According to the draft red herring prospectus (DRHP), the net proceeds from the IPO will be utilized to enhance Avanse’s capital base, supporting future capital needs due to business and asset growth.

Investment Banks Involved

• Kotak Mahindra Capital
• Nomura
• JP Morgan
• Avendus Capital
• Nuvama
• SBI Capital

Background and Financials

Warburg Pincus acquired an 80% stake in Avanse Financial Services from the Wadhavan Global Capital group in March 2019. IFC has been involved since 2013, and Kedaara Capital invested ₹800 crore in January 2023.

Avanse offers loans across three segments: student loans, loans for professionals, and institutional loans. As of March 31, 2024, it is the second-largest education-focused NBFC in India by assets under management (AUM). The company also had the second-highest disbursements and profit after tax in FY2024 among its peers.

Financial Growth

• AUM Growth: From ₹4,835.6 Crore (March 31, 2022) to ₹13,303 Crore (March 31, 2024), with a CAGR of 65.86%.
• Total Income:
  • FY2022: ₹508.5 Crore
  • FY2023: ₹990 Crore
  • FY2024: ₹1,729 Crore
• Net Profit:
  • FY2022: ₹63.2 Crore
  • FY2023: ₹158 Crore
  • FY2024: ₹342.4 Crore