In a significant move to bolster its growth trajectory, Mumbai-based Avanse Financial Services announced on January 5 that it has successfully raised approximately Rs 1,200 crore through a rights issue from its existing shareholders. The funds are earmarked to accelerate the company's expansion in the education lending sector, diversify its product offerings, and fortify its financial foundation.
Major Investors Back Avanse's Vision
The capital infusion came from a consortium of prominent global investors. The primary contributors include private equity giant Warburg Pincus through its affiliate Olive Vine Investment, Kedaara Capital via its Growth Fund III and Kedaara Pichola Holding, and Mubadala Investment Company's affiliate, Alpha Investment Company. This substantial equity raise significantly enhances Avanse's capital base, positioning it to capitalize on the surging demand for both domestic and international education loans.
Strategic Allocation of the Fresh Capital
The company has outlined a clear roadmap for deploying the newly acquired funds. A major portion will be directed towards scaling up education loan disbursements to reach a wider pool of students, across more diverse courses and geographies. Avanse also plans to broaden its product suite, introducing options like flexi-term loans and receivable financing term loans.
Furthermore, the capital will be utilized to seed new business ventures in identified financing gaps within the education ecosystem. Investments are also planned for strengthening digital platforms and analytics capabilities, deepening collaborations with universities, colleges, and education counsellors, and shoring up capital adequacy to ensure balance sheet resilience.
Leadership Confident in Market Potential
Amit Gainda, Managing Director and CEO of Avanse Financial Services, stated that the successful rights issue is a strong endorsement of the company's strategy and governance from its shareholders. He emphasized that this capital will empower the company to scale responsibly, extend its reach to more customers, identify untapped opportunities, drive product innovation, and continue building an inclusive financing ecosystem.
Gainda highlighted that India's education financing market is poised for robust growth, underpinned by favourable demographics, an increasing appetite for higher education, and a growing need for structured financial support. He expressed confidence that Avanse, with its domain expertise, disciplined underwriting, and technology-enabled operating model, is well-positioned to capture this expansive opportunity.
