Avanse Financial Services is an education-focused non-banking financial company that plans to float an IPO and has submitted a DRHP with SEBI to issue ₹3,500 crore worth of IPO. Avanse Financial Services, the second-largest education-focused NBFC in India, is preparing for a massive IPO.
IPO Structure
The IPO consists of a new share issuance of ₹1,000 crores and an OFS of up to ₹2,500 crores by present investors. Some of the lead managers on the issue are Kotak Mahindra Capital, Avendus Capital, JP Morgan India, Nomura Financial Advisory India, Nuvama Wealth Management, and SBI Capital Markets.
Interest Rates Offered by Avanse Financial Services
Avanse Financial Services provides Education Loans at interest rates between 9% and 25%. However, the actual rate that applies to each loan is fixed by the management depending on the respective loan. Often, the interest rate of Avanse loans fluctuates between 10% and 16.5% per annum. They offer reasonable repayment terms and quick loan approval, which makes them suitable for students seeking loans to fund their college.
Shareholder and Business
The OFS comprises Olive Vine Investment, which is a Warburg Pincus affiliate holding over 58% stake in Avanse, is offering up to ₹1,758 crore MW of shares, IFC offering up to ₹342 crore MW of shares, and Kedaara Capital Growth Fund offering up to ₹400 crore MW of shares. Avanse has education products that are both complete and diverse, such as the International business segment, which offers loans to 35,802 students in 1,264 universities/colleges in 41 countries.
Comparison of Avanse to other education-focused NBFCs in India
Avanse Financial Services is known to be one of the most recognized education-oriented NBFCs operating in India. Unlike many other banks that offer a full range of services, HDFC Credila specializes in education loans. First of all, it is a branch of HDFC Bank that is one of the most successful financial companies. This means that HDFC Credila has various loan types based on the needs of the borrowers. It covers education financing both at the local and international levels. By March 2024, Avanse stands second in AUM in the league of NBFCs focusing solely on the education sector.
Avanse’s range of educational finance solutions includes student loans whether for international or domestic education, funding for educational institution expansion, and education infrastructure financing. Avanse targets students, working professionals, and other private institutions in India through a collateral-based funding model. Avanse has recently declared the draft prospectus for IPO to mobilize ₹3,500 crores to further affirm its growth strategy.
Conclusion
Avanse Financial Services IPO may be considered as a positive sign for the education financing sector through the message of quality and expansion. HDFC Credila as well as Avanse play a major role in fulfilling dreams of education across the country. The generated IPO proceeds will increase Avanse’s capital base to enhance business and asset development. For Avanse Forum, sustainable focus and innovative offerings are going to be the next steps toward further empowering education finance.
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