US private equity major Warburg Pincus-promoted Avanse Financial Services has shortlisted 6 investment banks as advisors as the Mumbai-based firm gears up to go public in 2024 to raise around Rs 4,000 crore, multiple industry sources told Moneycontrol.
If the plans of Avanse fructify, it would arguably be the first-ever listing by an education-focused NBFC in India.
On November 30, Moneycontrol was the first to report that Avanse was simultaneously looking to tap external investors and raise around Rs 1000 crore in primary capital. The firm is also backed by Kedaara Capital and World Bank group arm IFC.
"After the pitches held late last year, Avanse shortlisted Kotak Mahindra Capital, Nomura, JP Morgan, Nuvama, Avendus Capital and SBI Caps for the IPO syndicate," one of the sources told Moneycontrol.
A second source said that the deal was likely to be kicked off in January. The listing will facilitate a partial exit for the investors and help mop up additional growth capital for the fast-growing Avanse, if required, this person said.
Three more persons confirmed the syndicate of six advisors. One of them said the target was to launch the IPO after the elections.
All the five persons spoke to Moneycontrol on condition of anonymity.
Avanse Financial Services, however, refused to confirm any such development. "This seems to be an industry speculation about our organisation. As a practice, we do not comment on industry speculations," said a spokesperson for the company.
Email queries sent to Warburg Pincus, Nuvama, SBI Caps , Kotak Mahindra Capital and Avendus Capital were left unanswered till the time of publishing this article. JP Morgan and Nomura declined to comment.
Other players in the NBFC segment are also aiming to list this year.
On December 5, Moneycontrol reported that TPG and Norwest Ventures-backed SK Finance, a Jaipur-based used vehicle financier, had kickstarted preliminary discussions with investment banks to explore an IPO.
HDFC Credila (now owned by BPEA EQT), Auxilo Finserve and Incred are some of the peers of Avanse Financial Services.
In March 2019, Warburg Pincus entered into definitive agreements to acquire an 80 percent stake in Avanse Financial Services held by Wadhavan Global Capital group. IFC had come on board way back in 2013. In January 2023, Kedaara Capital infused Rs 800 crore into the firm.
According to its website, Avanse Financial Services provides loans across the following segments: student loans, loans for professionals and institution loans.
The website says the organisation has helped 4 lakh academic aspirants across 4,000-plus institutes and 30,000-plus courses in more than 50 countries. The company has also provided growth and working capital to around 2,000 educational institutes catering to over 10 lakh students.
The company's total assets under management stood at Rs 7,191 crore in the first half of FY23, a 1.9-times growth over the previous year. Its loan disbursements reached Rs 3,369 crore, representing a three-fold surge over H1 FY22. The net worth of the company was Rs 1,474 crore and it achieved 1.7x and 2.2x growth in its revenue and net profit in H1Fy23, which were at Rs 411 crore and Rs 70 crore a year back.
In June, 2023, HDFC Ltd signed definitive documents for the sale of approximately 90 percent stake in its education loan subsidiary HDFC Credila to a consortium of private equity firms led BPEA EQT and ChrysCapital for around Rs 9,060 crore.
The total revenue of HDFC Credila during FY23 stood at Rs 1,352.18 crore while its net-worth as on March 31, 2023 was Rs 2,435.09 crore.
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