Avanse Financial Services, an education loan provider backed by private equity firms including Warburg Pincus, has taken a significant step towards its public debut. The Mumbai-based company has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) aimed at raising Rs 3,500 crore.
The IPO will comprise fresh shares worth Rs 1,000 crore, which will be utilized to bolster Avanse’s capital base. Additionally, existing shareholders, including Warburg Pincus, Kedaara Capital, and IFC, plan to offload shares worth Rs 2,500 crore in this offering.
Avanse Financial is the first education-focused non-banking finance company (NBFC) in India to seek a public listing, highlighting its leadership in providing financial solutions tailored for educational purposes. The company offers a range of products from education loans for students pursuing studies abroad or domestically to infrastructure financing for educational institutions across India.
“We are excited about the opportunity to broaden our investor base through this IPO,” said a spokesperson for Avanse Financial Services. “Our growth trajectory is underpinned by a robust demand for education financing solutions, both among students and institutions.”
As of March 31, 2024, Avanse had provided loans to over 35,000 students attending universities in 41 countries, underscoring its international footprint in the education financing sector.
The IPO comes amid a burgeoning market for education loans in India, with the total portfolio reaching Rs 1.66 trillion as of December 2023. Avanse Financial, alongside HDFC Credila, is a prominent player in the NBFC segment of this market, complementing the dominant presence of banks like State Bank of India (SBI).
Kotak Mahindra, Avendus Capital, JP Morgan, Nomura, Nuvama, and SBI Capital have been appointed as the bankers managing the IPO process.
The proposed listing is expected to provide Avanse Financial Services with enhanced financial flexibility to capitalize on the growing opportunities in the education finance sector, both domestically and internationally.