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Avanse Financial Services, a provider of education loans, has filed its draft red herring prospectus (DRHP) with SEBI for an initial public offering (IPO) valued at Rs 3,500 crore. This Mumbai-based firm aims to issue fresh shares worth Rs 1,000 crore to bolster its capital base.
Private equity firms Warburg Pincus, Kedaara Capital, and IFC plan to sell shares worth Rs 2,500 crore in the IPO. Avanse is the first education-focused non-banking finance company (NBFC) to pursue a public listing.
The company offers a variety of products, including student education loans and growth capital for educational institutions via education infrastructure loans. Avanse supports Indian students and professionals studying both domestically and internationally.
As of March 31, 2024, Avanse had extended loans to 35,802 students across 1,264 universities in 41 countries. The growing demand for higher education has significantly increased the need for student loans, with the overall educational loan portfolio rising to Rs 1.66 trillion by December 2023, up from Rs 1.36 trillion in March 2023.
In India, banks hold 76% of the total education loan portfolio, while NBFCs account for the rest. Among NBFCs, HDFC Credila and Avanse Financial are leaders.
Avanse's institutional loan business has assets under management (AUM) of Rs 22,663 crore, which is 17% of its total AUM, with an average loan size of Rs 1.4 crore.
These loans primarily fund infrastructure and capital needs with flexible terms. Avanse had outstanding loans to 1,990 educational institutions as of March 31, 2024. The IPO is managed by Kotak Mahindra, Avendus Capital, JP Morgan, Nomura, Nuvama, and SBI Capital.
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