The much-anticipated Avanse Financial Services IPO aims to raise ₹3,500 crores and marks a significant move in the Indian financial market. As a leading non-banking financial company (NBFC) in India focused on the education sector, Avanse Financial Services is set to make a substantial impact. Below, we dive into the main details of this Avanse Financial IPO.
Avanse Financial IPO Overview
| IPO Details | Value |
|---|---|
| IPO Size | ₹3,500 crores |
| Issue Type | Book Built Issue |
| Fresh Issue | ₹1,000 crores |
| Offer for Sale (OFS) | ₹2,500 crores |
| Face Value | ₹5 per share |
This IPO consists of a fresh issue component aimed at raising ₹1,000 crores and an offer for sale of up to ₹2,500 crores, providing existing shareholders a chance to offload their holdings.
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Important Dates for Avanse Financial Services IPO
- Open Date: 2024
- Close Date: 2024
- Listing Date: 2024
- Price Band: To Be Announced
The specific IPO dates, including the open, close, and listing dates, are yet to be announced. Investors are advised to keep an eye out for these updates to plan their participation.
IPO Reservation for Different Categories
- Qualified Institutional Buyers (QIBs): Not more than 50% of the net offer
- Retail Investors: Not less than 35% of the net issue
- Non-Institutional Investors (NII/HNI): Not less than 15% of the net issue
This reservation structure aligns with SEBI guidelines, providing retail investors a solid portion of the allocation.
Company Profile: Avanse Financial Services
Avanse Financial Services Limited is a leading NBFC specializing in the education sector. As per the CRISIL MI&A Report, the company holds the position of the second-largest education-focused NBFC in India in terms of assets under management (AUM) as of March 31, 2024. It also recorded the second-highest disbursements in FY 2023 and the second-highest profit after tax among education-focused NBFCs in FY 2024.
Products and Services
Avanse Financial Services offers a range of products, including:
- Student Loans (Domestic & International): Loans for students pursuing education both in India and abroad.
- Education Infrastructure Loans: Secured financing for private educational institutions in India.
- Value-Added Services: Insurance products, including life, health, and travel insurance, are provided to borrowers.
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Financial Performance
The company has shown impressive growth:
- Revenue in 2024: ₹1,728.81 crores (compared to ₹990.23 crores in 2023)
- Profit in 2024: ₹342.4 crores (compared to ₹157.71 crores in 2023)
The robust financial performance highlights Avanse’s strong market position and growth potential.
Objects of the Issue
The net proceeds from the IPO are planned to be utilized for:
- Augmenting the Capital Base: To meet the future capital requirements arising from business and asset growth.
- Covering Offer Expenses: A portion of the proceeds will go toward meeting expenses related to the IPO process.
Grey Market Premium (GMP) Trends
The grey market premium (GMP) is a good indicator of market interest before listing. Currently, based on recent sessions, no major movement is observed in the GMP. Investors should keep track of daily updates on GMP trends to gauge potential listing prices.
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Financial Analysis
| Particular | As of 31 March 2022 | As of 31 March 2023 | As of 31 March 2024 |
|---|---|---|---|
| Revenue (₹ in millions) | 5,082.84 | 9,895.97 | 17,269.60 |
| Equity (₹ in millions) | 10,096.64 | 21,497.22 | 36,767.17 |
| Expenses (₹ in millions) | 4,230.81 | 7,789.14 | 12,695.14 |
| Profit and Loss After Tax (₹ in millions) | 632.07 | 1,577.11 | 3,424.03 |
| Diluted EPS only (₹) | 3.78 | 8.5 | 15.05 |
| Return on Net Worth (%) | 6.26 | 7.34 | 9.31 |
| NAV per Equity Share (₹) | 61.12 | 100.8 | 146 |
| Total Assets (in millions) | 54,530.15 | 97,299.51 | 143,438.35 |
| Total Liabilities (in millions) | 44,433.51 | 75,802.29 | 1,06,671.18 |
Should You Invest?
Avanse Financial Services, with its strong financials and focused approach on the education sector, is well-positioned for long-term growth. The IPO presents an opportunity for investors seeking exposure to the education finance market.
Investors are encouraged to consider a long-term perspective on this IPO, as Avanse’s unique position in education finance, solid financial growth, and extensive service offerings hold promise for steady returns.