Avanse Financial Services Ltd, a prominent Indian non-banking financial company (NBFC) specializing in education financing, is all set to hit the public markets with its Initial Public Offering (IPO) valued at a substantial ₹3,500 crore. With a unique focus on empowering education through comprehensive financial solutions, Avanse is poised to capitalize on India’s growing demand for education financing. Here’s everything you need to know about this much-anticipated IPO.
About Avanse Financial Services
Founded in 2013, Avanse Financial Services Ltd operates as a focused education finance NBFC. It provides a complete range of education-related financial products, including student loans, skill enhancement loans, loans for studying abroad, and infrastructure financing for educational institutions. Headquartered in Mumbai, Avanse holds the title of the second-largest education-focused NBFC in India by assets under management (AUM) as of March 31, 2024, according to a report by CRISIL.
Avanse has gained solid backing from prominent investors, with Olive Vine Investment Ltd. (an affiliate of global private equity firm Warburg Pincus) as its primary promoter. Other institutional investors include International Finance Corporation (IFC), Kedaara Capital, and Mubadala Investment Company.
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Avanse IPO Structure
The ₹3,500 crore public offering by Avanse Financial Services Ltd is divided into two main components:
- Fresh Issue: Equity shares worth ₹1,000 crore aimed at expanding Avanse’s capital base and supporting the growth of its business and asset portfolio.
- Offer for Sale (OFS): Existing stakeholders will offload shares worth up to ₹2,500 crore in total. This includes:
- Olive Vine Investment selling shares worth up to ₹1,758 crore
- International Finance Corporation (IFC) offloading shares valued at ₹342 crore
- Kedaara Capital Growth Fund III LLP selling shares up to ₹400 crore
Avanse’s IPO, aims to fuel the company’s growth by expanding its capital base and lending portfolio, particularly in education-focused loans. The IPO proceeds will bolster Avanse’s mission to expand education financing in India, directing funds towards student, institutional, study-abroad, and skill-based loans. Additionally, the IPO will also enable key investors to partially exit, reinforcing Avanse’s position in India’s education finance sector.
Avanse Promoter and Shareholding
As of the latest Draft Red Herring Prospectus (DRHP) filed in late July 2024, Avanse’s promoter Olive Vine Investment holds a 58.38% stake in the company, equivalent to 149,394,074 shares. Currently, promoters hold a 59.32% stake, while institutional shareholders like IFC, Kedaara Capital, and Alpha hold the remaining 40.68%.
Avanse Financial Performance
Avanse has demonstrated impressive financial growth in recent years, with its net profit for FY24 soaring to ₹342.4 crore, up from ₹157.71 crore in FY23. Additionally, the company’s operating revenue nearly doubled, reaching ₹1,726.9 crore in FY24 compared to ₹989.5 crore in the previous fiscal year. This robust performance highlights Avanse’s growth potential as it expands its capital base and continues to leverage the rising demand in the education finance sector.
Conclusion
Avanse Financial Services Ltd is on track to debut on the Indian stock exchanges (NSE & BSE), and its upcoming IPO could provide investors with access to a unique growth story in the education finance sector. With strong backing, expanding revenue streams, and ambitious growth plans, Avanse’s IPO is one to watch for those interested in education-driven lending.
Whether you're a seasoned investor or a newcomer, keep an eye on Avanse’s listing and the opportunity to participate in India’s evolving education landscape.
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