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Avanse Financial Services IPO

Avanse Financial Services IPO

Avanse Financial Services Ltd

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Avanse Financial Services IPO Details

Issue Date

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Price Range

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Lot Size

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IPO Size

N/A

Schedule of Avanse Financial Services IPO

Start date

End date

Allotment of bids

Refund Initiation

Listing on exchange

About Avanse Financial Services Limited IPO

Avanse Financial Services Limited IPO is an IPO of ₹3,500 crores. It consists of an offer for sale of ₹2,500 crores and a fresh issue of ₹1,000 crores. The shares will be allotted on a date TBA. The credit of shares to the demat account will take place on a date TBA and the initiation of refunds will take place on a date TBA.

Objective of Avanse Financial Services Limited IPO

  • Offer expenses.
  • Means of finance.
  • Interim use of net proceeds.
  • Bridge financing facilities.
  • Monitoring of utilisation of funds.
  • Variation in objects.
  • Other confirmations.

Avanse Financial Services Limited IPO Valuation

Avanse Financial Services Limited IPO Share offer and Subscription Details

Industry Outlook

Despite the banking system dominating financial services. NBFCs have become popular. NBFCs will continue to gain market share over banks due to their ability to provide flexible lending solutions and tailored services, focused approach to tap the under-served and niche customer markets, ability to penetrate deeper into geographies, leveraging technology to reinvent the lending process, strong origination skills and shorter turnaround time.

The education sector is expanding from all sides – students pursuing higher education and institutions expanding further. In India, the overall education market in fiscal 2024 is estimated at ~₹18.5-19.0 trillion, which includes both the overseas education market and the domestic education market. The growing number of individuals seeking higher education overseas and in India has led to an explosion in demand for student loans.

Company Information

Avanse Financial Services Limited is an education-focused non-banking financial company (“NBFC”) operating in India. According to the CRISIL MI&A Report’s description of their business, they offer a full stack education offering with products ranging from education loans for students to growth capital for education institutions through education infrastructure loans. They also provide collateral-backed financing to private educational institutions in India.

India’s second largest education focused NBFC by AUM and disbursements, and operating in a large and growing addressable market in India.

According to the CRISIL MI&A Report, education loans recorded AUM growth from ₹75 billion during the Financial Year 2019 to ₹90 billion during Financial Year 2021 and an estimated ₹418 billion during Financial Year 2024, at a CAGR of 41.1% between Financial Years 2019 and 2024, and a CAGR of 65% between Financial Years 2021 and 2024, which is significantly higher than other asset classes. The CRISIL MI&A Report also describes that NBFCs’ share in the overall education loan market also increased from 8% as of March 31, 2019, to 24% as of December 31, 2023.

Pan-India, multi-channel distribution presence, enabling widespread coverage with limited reliance on branches.

They operate on a pan-India front and have a multi-channel distribution network across their student and educational institution loans businesses, with physical locations in major education hubs in India. According to the CRISIL MI&A Report, education loans focused NBFCs have a differentiated distribution approach with a higher degree of reliance on education counsellors, DSAs, and digital channels as compared to a physical branch network which is predominantly required for other traditional loans such as mortgages, MSMEs and LAP. As of March 31, 2024, they serviced 545 locations in India, maintaining a hybrid presence, and strategically combining a physical branch network of 19 branches and sales representative offices, staffed with a 215-member sales team, with their distribution network.

Technology and analytics-driven business, with scalable operating model.

Technology has been at the forefront of their operations to drive distribution reach, operational and collection efficiency and overall borrower experience. They have adopted a cloud first approach and their technology systems are scalable to cater to various student profiles, with enhanced application performance and cost efficiency. They have also implemented security solutions utilising an integrated security information and incident management tool. They also have an API-driven technology landscape, enabling them to handle the requirements of various product types.

Risks of Avanse Financial Services Limited IPO

  • The company’s student loans – international business is largely concentrated in the United States, Canada and the United Kingdom. This exposes them to political and macro-economic risks in these geographies, which could adversely affect their business, results of operations and cash flows.

  • The company is vulnerable to volatility in interest rates for both their borrowing and lending operations, which could cause their net interest income to vary and consequently, affect their profitability.

  • They rely significantly on their information technology systems and a breach of or cyber-attacks on their technology systems could adversely affect their business and lead to financial, legal, and reputational damage.

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Peers Comparison

Since there are no listed peer companies that engage in a business similar to that of Avanse Financial Services Limited. Accordingly, it is not possible to provide an industry comparison in relation to the stated company.

Anchor Investor Information

The Anchor Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date.

IPO Registrar and Book Running Lead Managers

Book running lead managers:

Kotak Mahindra Capital Company Limited Avendus Capital Private Limited J.P. Morgan India Private Limited Nomura Financial Advisory and Securities (India) Private Limited Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) SBI Capital Markets Limited

Registrar for the IPO is Link Intime India Private Limited

Business Model

The company earns its revenue through the following sources:

  • Primarily by providing business loans for infrastructure development and other capital requirements, with flexible loan tenures, and their experience and domain knowledge enable them to underwrite educational institution loans based on the existing cash flows and income, among other factors.
  • Offer education loans to Indian students looking to pursue higher education overseas and in India. Their domestic business also includes loans to professionals engaging in executive learning programs, and financing for both curriculum fees for students enrolled in accredited schools, and non-curriculum fees associated with skilling programs, executive education, and test preparation courses, all in India.

Company Growth Trajectory

Their revenue from operations increased from ₹5082.84 crores in FY22 to ₹17,269.60 crores in FY24, clocking a whopping revenue growth of 239%. Their PAT increased from ₹854.60 crores in FY22 to ₹4592.92 crores in FY24. Their PAT grew at an astounding 437% over the two years.

Company Market Position

As of March 31, 2024, they are the second largest education focused NBFC in India by assets under management (“AUM”). According to the CRISIL MI&A Report, they also have the second-highest disbursements during the financial year 2023 and recorded the second highest profit after tax in financial year 2024 among education-focused NBFCs in India.

Avanse Financial Services Limited Company Profit & Loss

Avanse Financial Services Cash Flow

How To Check Allotment Status of Avanse Financial Services Limited IPO?

You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar Link Intime India Private Limited. To check the status on the BSE website:

  • Visit the BSE website
  • Click on “Investor Services” and choose “Application Status Check”
  • Choose the issue type — Equity or Debt (Equity in this case)
  • Select the Issue Name from the drop-down. The issue name is the company’s name, which is Avanse Financial Services Limited
  • Enter your application number or PAN number
  • Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

  • Visit the Link Intime India Private Limited website
  • Choose “Public Issues” from the “Investor Services” drop-down
  • Select Avanse Financial Services Limited from the drop-down
  • Enter your PAN number or Application number
  • Click on “Submit” to know the allotment status

How To Apply for Avanse Financial Services Ltd IPO?

Here are the steps to apply for Avanse Financial Services Ltd IPO:

Step 1: Log in to your Kotak Neo Demat account Log in to your Demat account to access IPO investments. Next, select the current IPO section.

Step 2: Specify IPO details Enter the number of lots and the price you wish to apply for.

Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.

Step 4: Mandate Notification Your UPI app will receive a mandate notification to block funds.

Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.

Avanse Financial Services IPO FAQs

The Avanse Financial Services IPO opens for subscription from [-] to [-], with a total issue size of [-]. The IPO price band is ₹[-] per share with a lot size of [-]. The company aims to list the shares on BSE & NSE on [-].

The Avanse Financial Services IPO will open for subscription on [-] and will close on [-] for investors.

The minimum lot size for the Avanse Financial Services IPO is [-] equity shares, requiring a minimum investment of ₹[-] for retail investors applying in the IPO.

The price band of the Avanse Financial Services IPO has been fixed at ₹[-] per equity share.

You can apply for the Avanse Financial Services IPO online through the Kotak Neo Website or the Kotak Neo App using UPI or ASBA during the IPO subscription period.

Avanse Financial Services IPO allotment will take place on [-].

You can check the Avanse Financial Services IPO allotment status online on the registrar’s website or on the NSE and BSE IPO allotment pages using your application number, PAN, or demat account details.

Avanse Financial Services shares will list on the stock exchanges on [-].

The Avanse Financial Services Limited IPO has an issue size of ₹3,500 crores. The IPO opens for subscription on TBA and closes on TBA.

Link Intime India Private Limited is the registrar for this IPO.

You may read more about Avanse Financial Services Limited and its IPO from the company’s red herring prospectus (RHP) here: (SEBI | Avanse Financial Services Limited DRHP)

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