Warburg Pincus, IFC infuse more funds in education focussed NBFC portfolio

NEW DELHI: Avanse Financial Services Ltd. , an education-focused non-banking financial company (NBFC), has raised 390 crore, or about $48.7 million, from its existing backers US-based buyout fund Warburg Pincus and IFC, the private investment arm of the World Bank.

The transaction values the NBFC at nearly 1,450 crore.

Warburg Pincus has routed the investment through its affiliate Olive Vine Investment Ltd. The PE fund is said to have contributed 80% of the newly infused capital, as per a press statement.

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, MD at Warburg Pincus.

Avanse Financial Services claims to have fulfilled the educational dreams of 2.5 lakhs 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 500,000-600,000 students.

The company, which was founded in 2013, boasts of 4,836 crore worth of assets under management (AUM), while achieving a CAGR (compounded annual growth rate) 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 Corp. (IFC), which was a returning investor in the very transaction, had retained a 20% stake in Avanse.

In January this year, the education-focused NBFC had sealed its first securitization transaction to raise 357 crore. The deal was facilitated by debt financier Northern Arc Capital.

Indian NBFCs have been garnering investor attention for quite some time now.

In May, IFC 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 invested around 940 crore as growth capital to pick up minority stake in Hero Fincorp, the lending unit of the Hero Group.

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Updated: 21 Sep 2022, 04:26 PM IST


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