Avanse Financial Services Limited IPO: Overview, Details, and Insights
Avanse Financial Services Limited, a prominent Indian non-banking financial company (NBFC) specializing in education financing, has filed for an initial public offering (IPO) to raise ₹3,500 crore.
IPO Structure:
Fresh Issue: ₹1,000 crore
Offer for Sale: ₹2,500 crore
The Offer for Sale includes shares from major stakeholders:
Olive Vine Investment: ₹1,758 crore
International Finance Corporation: ₹342 crore
Kedaara Capital Growth Fund III: ₹400 crore
Company Overview:
Avanse Financial Services is India's second-largest education-focused NBFC, offering a range of education financing solutions, including student loans for international and domestic studies, as well as infrastructure loans for educational institutions. As of March 2024, the company's assets under management (AUM) reached ₹13,303 crore, reflecting a compound annual growth rate (CAGR) of 65.86% since March 2022.
Financial Performance:
Revenue: Increased from ₹990.23 crore in 2023 to ₹1,728.81 crore in 2024.
Profit After Tax: Rose from ₹157.71 crore in 2023 to ₹342.4 crore in 2024.
Use of Proceeds:
The funds raised through the IPO are intended to augment the company's capital base, supporting future business growth and expansion of assets.
IPO Timeline:
While the company has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), the exact dates for the IPO, including the opening and closing dates, price band, and lot size, are yet to be announced.
Risks and Considerations:
Potential investors should be aware of several risks associated with the company:
Geopolitical Exposure: Significant operations in international markets like the U.S., U.K., and Canada may expose the company to geopolitical risks.
Unsecured Loans: A substantial portion of the company's loan portfolio comprises unsecured loans, which could elevate credit risk.
Regulatory Compliance: As an NBFC, the company is subject to stringent regulatory oversight, and any non-compliance could result in penalties.
Conclusion:
Avanse Financial Services' upcoming IPO presents an opportunity to invest in a rapidly growing education-focused NBFC with a strong financial track record. However, potential investors should carefully consider the associated risks and await the announcement of specific IPO details before making investment decisions.
