Education loans-focused non-banking lender Avanse Financial Services Ltd on Thursday said it has raised primary capital of Rs 800 crore (around $98.5 million) from homegrown private equity firm Kedaara Capital to fuel its growth plans.
Existing backer Warburg Pincus will continue to be the majority shareholder in Avanse.
In November last year, Mint had first reported that private equity firms, including Kedaara Capital, are in talks with Warburg Pincus to buy some of its stake in Avanse.
“Avanse is at an exciting phase of growth. As the world recovered post the pandemic, we witnessed a significant resurgence of students seeking higher education at international locations,” said Amit Gainda, managing director and chief executive at Avanse Financial Services.
“The growth capital will enable us to strengthen our brand proposition, integrate digital solutions and innovate to build more depth into our product range as we work towards delivering greater stakeholder value,” he added.
Avanse Financial provides education-focused loans to students, professionals and institutes in India. The company, founded in 2013, claims to have catered to nearly 3 lakh academic aspirants across more than 3,000 institutes in over 50 countries. It has also provided growth and working capital to more than 1,000 educational institutes.
As of December 2022, the non-banking lender has Rs 8,000 crore of assets under management. The company disbursed loans worth Rs 4,850 crore during the first nine months of financial year 2023 , about 2.5 times as compared to the same period last year.
“We look forward to using our operational expertise and experience in the financial services space to help them realise their long-term vision,” said Sunish Sharma, managing partner and Co-chief executive at Kedaara Capital.
Mumbai-based Kedaara Capital has invested in companies like AU Small Finance, Veritas Finance, Aavas Financiers Limited (formerly known as Au Housing Finance) across its three funds in the financial services space. It also has companies like beauty ecommerce platform Purplle, hospital chain ASG Eye hospitals in its portfolio.
“The fresh primary infusion will significantly improve the company’s capitalisation, providing a strong base for future growth,” said Kartikeya Kaji, Managing Director, Kedaara Capital.
Avendus Capital acted as the exclusive financial advisor for the transaction.
The latest investment from Kedaara comes a few months after capital infusion from Warburg and IFC, the private investment arm of the World Bank, in September 2022, when it had raised Rs 390 crore. Warburg had first invested in the company, when it bought an 80% stake in Avanse from Wadhawan Global Capital Ltd and its unit Dewan Housing Finance Corporation Ltd (DHFL) in March 2019.
New York-headquartered Warburg has an active portfolio of more than 260 companies with more than $85 billion in assets under management. In India, the company has invested in startups like boAt, Ola, The Good Glam Group, among others.