Avanse’s Net Profit Surges 47% To INR 502 Cr In FY25

The consolidated net profit of education-focussed NBFC Avanse Financial Services surged 46.6% to INR 502 Cr in the financial year ended March 31, 2025 (FY25) from INR 342.4 Cr in the previous financial year. 

The IPO-bound NBFC’s revenue from operations has soared 36% to INR 2,347 Cr from INR 1,727 Cr in FY24. 

The total asset under management (AUM) for the company has increased YoY by 1.4X to INR 18,985 Cr in FY25 from INR 13,303 Cr. Meanwhile, disbursement of loans also saw an uptick of 9% to INR 6,914 Cr in FY25 from INR 6,335 Cr in the previous year. 

Founded in 2013 by Amit Gainda, Avanse offers education loans to students who want to study abroad or in India. It also facilitates education institutions such as schools with access to capital for infrastructure building. 

The Mumbai-based NBFC sees most of its business coming from students in India interested in studying abroad. The segment’s AUM stood at INR 15,275 Cr and saw loan disbursement accounting to INR 5,152 Cr in the year. This was followed by the segment which caters to education institutions, where AUM stood at INR 3,068 Cr with a total loan disbursement of INR 1,501 Cr in FY25.

The annual report of the company mentioned that there is a huge surge in the number of Indian students studying abroad and the figure has increased over the years. This number has leaped to 13.3 Lakh in CY24, up 48% from 9 Lakh in CY22. 

Moreover, the education sector in India is also seeing a drastic change as it is more focussed on giving holistic learning and development to their students. This has compelled them to invest in digital classrooms, edtech, labs and sports facilities for extra curricular activities. 

The lending major attracted a major chunk of its revenue from interest income which increased 39.5% to INR 2,014.4 Cr in FY25 from INR 1,443.7 Cr in the previous fiscal year. 

Revenue from fees and commission and net gain on fair value charges grew YoY 23% and 10.6%, respectively in FY25. While revenues from fee and commission stood at INR 227 Cr, net gain on fair value charges accounted for INR 14.6 Cr in the year. 

The company’s net gains on derecognition of financial instruments added INR 91 Cr to its top line in FY25, up 6% from INR 85.6 Cr in the previous year. 

Where Did Avanse Spend? 

The company’s total expenditure soared to INR 1,679.6 Cr in FY25, up 32.3% from INR 1,269.5 Cr in the previous fiscal year. 

Finance Cost: The expenses under this head stood at INR 1,217 Cr during the period under review, an increase of 39% from INR 875.6 Cr in FY24. Finance cost includes interest on borrowings, lease liabilities and debt securities. 

Employee Benefits: The expense under this section grew 20.7% to INR 170 Cr in FY25 from INR 140.8 Cr in the previous year. These include salary cost, contribution to provident fund and gratuity. 

Impairment Loss: The company’s impairment loss went down by 18.6% to INR 64.7 Cr in the period from INR 79.5 Cr in FY24. An impairment loss is a loss when the carrying value of a company’s asset, such as property, plant, or intangible assets like goodwill, permanently falls below its recoverable amount or fair value.

The IPO-bound lender had filed a DRHP for the public issue in June last year and got SEBI’s nod on the same in October. But has still kept its listing plans on hold. The company’s annual report mentions that Avanse is “awaiting conducive market conditions to complete its IPO.” 

It is speculated that the company has delayed its IPO plans amid slowing loan demand in students due to stricter US visa rules.

The fintech startup is eyeing to raise INR 3,500 Cr via its public listing. Its IPO comprises a fresh issue of shares worth INR 1,000 Cr an an offer for sale (OFS) component of shares worth up to INR 2,500 Cr.