Avanse Financial Services IPO Upcoming
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About Avanse Financial Services
Avanse Financial Services Limited is a leading Indian non-banking financial company (NBFC) focused on education, ranking second in the sector by assets under management (AUM) and profit according to CRISIL MI&A’s March 2024 report. They provide comprehensive education financing, including international and domestic student loans and infrastructure loans for educational institutions. Their AUM grew from ₹48.4 billion in March 2022 to ₹133 billion in March 2024, with a CAGR of 65.86%. The international student loan segment, representing 78.28% of AUM, serves nearly 36,000 students across 41 countries, primarily in STEM and MBA fields. They also fund over 1,900 Indian educational institutions with collateral-backed loans, while domestic student loans support professionals and students in India. Their loans feature flexible repayment options, personalised underwriting, and added services like insurance and foreign exchange. They leverage a hybrid distribution network of branches, education counsellors, and digital channels, reaching 545 locations across India.
Financials of Avanse Financial Services
Issue size
| Funds Raised in the IPO | Amount |
| Overall | ₹3500 crores |
| Fresh Issue | ₹1000 crores |
| Offer for sale | ₹2500 crores |
Strengths
- India’s second-largest education-focused NBFC with rapid AUM growth, reaching ₹13,303 crores in 2024 at a CAGR of 65.86%.
- Pan-India presence across 545 locations through a hybrid distribution model, supported by limited branches and a lean sales team.
- Advanced data and AI-driven underwriting and collections framework, maintaining a low loan default rate of 0.43%.
- Strong asset-liability management and diversified lender base, with a reduced debt-to-equity ratio of 2.76 by 2024.
- Robust financial growth, with disbursements up 47% CAGR and net profit rising over five times since 2022, backed by experienced leadership and marquee investors.
Risks
- Exposure to political and macroeconomic risks in key international markets, including the United States, Canada, and the United Kingdom, could adversely impact business operations and cash flows.
- A high proportion of unsecured loans in international and domestic student loan segments increases operational and credit risk, potentially affecting financial stability.
- Heavy reliance on borrower employability for loan repayment and a lack of job placement post-graduation among borrowers could negatively impact business performance.
- Potential challenges in the timely recovery of outstanding amounts on secured loans could strain financial results and cash flow.
- Reputational risks due to negative publicity could harm the company’s image and impact business operations.
- Competitive pressures within India’s education finance sector may impair the company’s ability to maintain its market position, affecting business and financial health.