Avanse Financial Services Files Draft Paper with SEBI to Raise Rs.3,500 Crore via IPO

Avanse Financial Services, a prominent education-focused NBFC, has initiated the process to go public by filing a DRHP with SEBI as the company aims to raise Rs.3,500 crore through an IPO.

IPO Structure and Objectives

The proposed IPO comprises a fresh issue of shares worth Rs.2,000 crore and an OFS of shares valued at Rs.1,500 crore by existing shareholders. The primary objective of the fresh issue is to strengthen the company’s capital base and support its growth plans, the funds will be used to increase lending capacity and meet future capital requirements.

Investment Banks and Stakeholders

Several prestigious investment banks are managing the proposed listing of Avanse Financial Services. These include Kotak Mahindra Capital, Nomura, JP Morgan, Avendus Capital, Nuvama, and SBI Capital, bringing good expertise to ensure a successful public offering.

Capital Raises and Investments

In November 2023, Avanse Financial Services was reported seeking around Rs.1,000 crore in primary capital from external investors. This capital raise was successfully led by Middle East investor Mubadala in March. 

Additionally, Warburg Pincus acquired an 80% stake in Avanse from the Wadhavan Global Capital group in March 2019. The International Finance Corporation (IFC) has been a stakeholder since 2013. Finally, in January 2023, Kedaara Capital infused Rs.800 crore into the firm.

Financial Performance

Background and Position

Avanse Financial Services has established itself in the education financing sector, offering loans for higher education, skill development, and professional courses both domestically and internationally. As of the latest reports, the company’s loan book stands at approximately Rs.7,500 crore.

Future Prospects

Avanse Financial Services’ entry into the public market is expected to provide a competitive edge in the NBFC sector. The funds raised will enable the company to expand its reach, develop new products, and invest in technology. The Avanse Financial IPO is anticipated to attract significant investor interest, given the growing demand for education financing in India.

Conclusion

Avanse Financial Services’ decision to go public marks a milestone in its journey towards becoming a leading education-focused NBFC in India. By raising Rs.3,500 crore through the IPO, the company aims to quicken its growth and solidify its presence in the rapidly expanding education financing market.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.