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Mumbai-based NBFC Avanse Financial Services, which focuses on education loans, has filed draft papers with the Securities and Exchange Board of India (SEBI) to raise Rs 3,500 crore through an initial public offering (IPO).
The IPO includes a fresh issue of shares worth Rs 1,000 crore and an offer for sale (OFS) by existing shareholders worth Rs 2,500 crore.
The selling shareholders include Warburg Pincus, Kedaara Capital, and IFC. The company's promoter, Olive Vine Investment Ltd., will sell shares worth Rs 1,758 crore, while IFC and Kedaara Capital will sell shares worth Rs 342 crore and Rs 400 crore, respectively.
What does Avanse Financial Services do?
Avanse Financial Services is a Mumbai-based non-banking financial company (NBFC) that provides loans for students, professionals, and educational institutions.
According to a CRISIL report, as of March 31, 2024, Avanse was the second largest education-focused NBFC in India by assets under management (AUM).
Funds utilization
According to the draft red herring prospectus (DRHP), the net proceeds from the IPO will augment Avanse's capital base to meet future capital requirements arising from the growth of its business and assets.
The firm aims to support its expansion and strengthen its financial position to better serve its clients. The proceeds from the OFS will go directly to the selling shareholders.
Appoints notable investment bankers
Kotak Mahindra Capital, Nomura, JP Morgan, Avendus Capital, Nuvama Wealth Management, and SBI Capital Markets are the investment banks working on Avanse's proposed listing. Link Intime has been appointed as the registrar for the issue.
The equity shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).
What Is Avanse's Financial Performance?
Avanse Financial Services has shown significant growth in recent years. Its AUM increased from Rs 4,835.6 crore as of March 31, 2022, to Rs 13,303 crore as of March 31, 2024, growing at a compound annual growth rate (CAGR) of 65.86% between March 31, 2022, and March 31, 2024.
The company's total income rose from Rs 508.5 crore in FY 2022 to Rs 1,729 crore in FY 2024. Net profit also increased from Rs 63.2 crore in FY 2022 to Rs 342.4 crore in FY 2024.