Avanse Financial Gets SEBI Nod For INR 3,500 Cr IPO

SUMMARY

The market regulator issued an observation to the NBFC on October 23, which is a greenlight to go ahead with the IPO

In late July, SEBI had returned Avanse Financial Services’ DRHP citing certain non-compliances, post which the NBFC refiled its IPO papers

Avanse’s IPO comprises a fresh issuance of shares worth INR 1,000 Cr and an OFS component of shares worth up to INR 2,500 Cr

Nearly three months after it refiled its draft red herring prospectus (DRHP), non-banking financial company (NBFC) Avanse Financial Services has received approval from the Securities and Exchange Board of India (SEBI) for its INR 3,500 Cr public issue.

The market regulator issued an observation to the NBFC on October 23, which is a greenlight to go ahead with the IPO. With this, all decks have been cleared for the company’s public listing on Indian bourses.

In late July, SEBI returned Avanse’s DRHP citing “non-compliance with Regulation 7(1)(a) of SEBI ICDR Regulations, 2018”. Following this, the company’s board and IPO committee convened on July 30 and July 31, respectively, to approve the refiling of DRHP. Subsequently, the updated IPO papers were filed on July 31.

Founded in 2013, Avanse offers education financing for students and educational institutions in India. It also caters to students looking to study abroad and offers skill enhancement loans. The company is backed by Warburg Pincus, International Finance Corporation (IFC), Kedaara Capital, and Mubadala Investment Company.

Its IPO will comprise a fresh issuance of shares worth INR 1,000 Cr and an offer for sale (OFS) component of shares worth up to INR 2,500 Cr.

It plans to use the fresh proceeds from the IPO to increase its capital base to fuel further expansion of its business. Meanwhile, the OFS segment will see Avanse’s promoter group Olive Vine Investment, an affiliate of Warburg Pincus, offload shares worth up to INR 1,758 Cr.

IFC and Kedaara Capital will also sell shares worth up to INR 342 Cr and INR 400 Cr, respectively.

Shares of Avanse will be listed on the BSE and the NSE.

As per the DRHP, Avanse reported a net profit of INR 342.4 Cr in the fiscal year 2023-24 (FY24) as against INR 157.71 Cr in the previous fiscal year. Meanwhile, operating revenue jumped nearly 2X to INR 1,726.9 Cr from INR 989.5 Cr in FY23.

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