On July 31, 2024, Avanse Financial Services Limited filed its DRHP with the Security and Exchange Board of India (SEBI), receiving approval for its ₹3,500 crore IPO on October 23, 2024. The IPO consists of a Fresh Issue of ₹1,000 crore and ₹2,500 crore Offer-for-Sale (OFS).
The company operates as a Non-Banking Financial Corporation (NBFC) and provides education loans to students who want to study abroad. The company is backed by prominent investors, including the International Finance Corporation (IFC), Warburg Pincus, Mubadala Investment Company, and Kedaara Capital.
Before investing in the Avanse Financial Services IPO, read this article to learn more about the company.
Avanse Financial Services IPO Details
Follow this table to know some of the important details about Avanse Financial Services IPO:
| Issue Type | 100% Book Built Offer |
| Name of the Registrar | Link Intime India Private Limited |
| Face Value | ₹5 |
| Price Band | TBD |
| Minimum Lot Size | TBD |
| Total Issue Size | ₹3,500 crore |
| Offer for Sale | ₹2,500 crore |
Company Financials of Avanse Financial Services IPO
Before you check other information, let us have a look at the latest financial reports of Avanse Financial Services:
| Particulars | For the Financial Year Ending (₹ In Crore) | ||
| March 31, 2024 (Consolidated) | March 31, 2023 (Consolidated) | March 31, 2022 (Standalone) | |
| Total Assets | 14,343.83 | 9,729.95 | 5,453.01 |
| Total Liabilities | 10,667.11 | 7,580.22 | 4,443.35 |
| Total Expenses | 1,269.51 | 778.91 | 423.08 |
| Total Revenue | 1,728.80 | 990.22 | 508.54 |
| Profit/Loss After Tax | 342.40 | 157.71 | 63.20 |
| EBITDA | 1,355.536 | 764.45 | 372.22 |
Strengths of Avanse Financial Services Limited
These are some of the strengths of Avanse Financial Services:
- Avanse is India’s second-largest education-focused NBFC by Assets Under Management (AUM) and disbursements. The AUM increased to ₹13,303 crore in FY24, from ₹8,646 crore in FY23, reflecting a 65.86% CAGR.
They offer student loans (domestic and international) and education infrastructure loans, along with value-added services like insurance and financial health reports. The total income grew to ₹1,729 crore in FY24, with net profit rising to ₹342 crore. - Avanse operates through a multi-channel distribution network spanning 545 locations. This includes 19 physical branches and a hybrid network of sales teams, education counsellors, Direct Selling Agents (DSAs), and direct acquisition channels.
As of March 31, 2024, 17.66% of disbursements came from direct channels, 37.43% from counsellors, and 39.78% from DSAs. The number of active education counsellors expanded to 320, driving AUM per branch growth at a 52.21% CAGR between FY22 and FY24. - The company employs a data-driven underwriting approach that assesses student employability and financial performance for student and institutional loans.
Its analytics-led collections framework, powered by the AlgoCollect platform and AI-ML models, ensures strong asset quality, maintaining a low GNPA of 0.43% overall and 0.08% for student loans-international. - The company maintains a well-diversified liability profile, securing funds through term loans, debentures, and securitisation from banks, financial institutions, and corporations.
Its debt-to-equity ratio improved from 4.06 times in FY22 to 2.76 times in FY24. The company raised ₹2,197.38 crore in capital between FY22 and FY24, with a CRAR of 27.52%. Its credit rating improved from ‘A+/Stable’ in 2019 to ‘AA-/Stable’ in 2023, ensuring lower borrowing costs and liquidity.
Risks Involved in Avanse Financial Services Limited IPO
With advantages, these are some of the risks involved with Avanse Financial Services Limited:
- The company’s former promoters are currently under regulatory scrutiny by enforcement agencies, including the Enforcement Directorate, due to their involvement in other business ventures.
While the company and its current promoter are not involved in these investigations, the outcome may adversely affect the company, its promoter, or the market price of its shares. - The company relies heavily on education counsellors, aggregators, and Direct Selling Agents (DSAs) for loan origination across its student, educational institution, and domestic loan segments. Any disruption, negligence, fraud, or inefficiency in their services could negatively impact the company’s operations, financial condition, and cash flows.
The company faces the risk that these agents may also work for competitors, which could affect its borrower base. Relationships with these agents are non-exclusive, exposing the company to potential service interruptions. - The company’s international student loan portfolio is highly concentrated in the United States, Canada, and the United Kingdom, accounting for 95.18% of its AUM as of March 31, 2024. This concentration exposes the business to political, macroeconomic, and social risks in these regions.
Additionally, changes in foreign policies, student visa norms, or disruptions like natural disasters or civil unrest in these countries could negatively impact the company’s operations, requiring significant expenditure and altering business strategies.
About Avanse Financial Services Limited
Founded in 2013, Avanse Financial Services is an education-focused Non-Banking Financial Company (NBFC) that helps Indian students achieve their academic dreams through customised education financing solutions.
The company is committed to making education and its financing more accessible in India by catering to the diverse needs of students while also providing growth and working capital solutions to educational institutions.
The company has a strong network of over 1,550 educational institutions in 49 countries and collaborates with more than 1,500 education counsellors, loan aggregators, and intermediaries.
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