Warburg Pincus-Backed Avanse Financial Services Files DRHP For INR 3,500 Cr IPO

Education-focussed non-banking financial company (NBFC) Avanse Financial Services has filed its draft red herring prospectus (DRHP) with markets regulator Securities and Exchange Board of India (SEBI) for an INR 3,500 Cr initial public offering (IPO). 

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

The OFS will see Avanse’s promoter group Olive Vine Investment, an affiliate of Warburg Pincus, offload shares worth up to INR 1,758 Cr. International Finance Corporation (IFC) and Kedaara Capital will sell shares worth up to INR 342 Cr and INR 400 Cr, respectively.

Besides the aforementioned companies, Avendus PE Investment Advisors and Mubadala Investment Company are the other shareholders of the NBFC.   

Avanse plans to use the proceeds from the fresh issue to increase its capital base to fuel further expansion of its business.

The NBFC’s shares will be listed on the BSE as well as the NSE.

Founded in 2013, Avanse provides education financing for students and educational institutions in India. Its financing solutions cater to students’ higher education abroad and in India. It also offers skill enhancement loans in India. The NBFC’s product portfolio includes student loans and institution loans. 

As per its DRHP, it has financed education of 35,802 students in over 1,264 educational institutions across 41 countries. It also claims to have a distribution network, which includes education counsellors, education loan-focused aggregators (marketplaces), and other loan intermediaries, of over 1,500 as of March 31, 2024.

Avanse said its assets under management (AUM) grew at a CAGR of 65.86% between March 31, 2022 and March 31, 2024, and stood at INR 13,303 Cr as of March 31 this year. 

Private equity firm Warburg Pincus acquired 80% stake in Avanse in 2019. It, along with IFC, also infused INR 300 Cr in the NBFC then. 

In March this year, Avanse raised INR 1,000 Cr in a funding round led by Abu Dhabi-based investment firm Mubadala Investment Company, along with participation from Avendus PE Investment Advisors. 

As per the DRHP, Avanse’s net profit rose to INR 342.4 Cr in the financial year 2023-24 (FY24) from INR 157.71 Cr in the previous fiscal year. Operating revenue grew to INR 1,726.9 Cr from INR 989.5 Cr in FY23.

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