Avanse Financial Services Ltd, an education-focused non-banking financial company (NBFC), has raised Rs 390 crore ($48.7 million) from its existing backers - US-based private equity player Warburg Pincus and IFC, the private investment arm of the World Bank.
Warburg Pincus has routed the investment through its affiliate Olive Vine Investment Ltd. The buyout fund is said to have contributed 80% of the newly infused capital, as per a press statement. The transaction has pegged the NBFC's valuation at nearly Rs 1,450 crore.
The equity raised will enable Avanse to strengthen its balance sheet and capital adequacy ratio.
“The equity infusion by the existing investors will enable Avanse to further leverage its deep domain expertise in the education sector and make credit accessible and affordable for more students to achieve their academic ambitions,” said Narendra Ostawal, managing director at Warburg Pincus.
Avanse Financial Services claims to have catered to 2.5 lakh academic aspirants across over 3,000 institutes and exceeding 22,000 courses in over 50 countries. The firm has also provided growth and working capital to nearly 1,000 educational institutes catering to over 5-6 lakh students.
Founded in 2013, the NBFC boasts of assets under management (AUM) worth of 4,836 crore, while clocking a compound annual growth rate (CAGR) of 22% over the last four years.
In March 2019, private equity firm Warburg Pincus had agreed to acquire an 80% stake in Avanse Financial Services from Wadhawan Global Capital Ltd and its unit Dewan Housing Finance Corporation Ltd (DHFL). World Bank's private-sector investment arm International Finance Corporation (IFC), who was a returning investor in that transaction, had retained a 20% stake in Avanse.
In January this year, the education-focused NBFC had sealed its first securitization transaction to raise Rs 357 crore. The deal was facilitated by debt financier Northern Arc Capital.
Indian NBFCs have been garnering investors’ attention for quite some time.
In May, International Finance Corporation (IFC), the private investment arm of the World Bank, proposed to make debt investments of up to $450 million in two Indian non-bank lenders, Cholamandalam Investments and Manappuram Finance Limited.
In June, microfinance lender Satya MicroCapital (Satya), focused on self-employed rural women, has raised fresh funding of $15 million led by its existing Japan based investor-Gojo & Company Inc.
In February, US-based private equity major Apollo Management had invested around Rs 940 crore as growth capital to pick up minority stake into Hero Fincorp, the lending unit of the Hero Group.