Avanse Financial Services – a Mumbai-based NBFC specializing in education finance – has taken a surprising turn. Instead of launching its much-awaited Avanse Financial IPO, the company has chosen to raise INR 1,374 crore through a rights issue. This funding round will primarily include its existing investors – Warburg Pincus, Kedaara Capital, Mubadala, IFC, and Avendus Future Leaders Fund.
This fresh capital injection suggests that Avanse is playing the long game — focusing on strengthening its base before heading back to the public market. Let’s break down what’s happening with the Avanse Financial IPO, why it’s on hold, and what it means for investors watching the education finance space and its Grey Market Premium trends.
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Avanse Financial IPO Rights Issue: The New Move
In December 2025, Avanse’s board approved a capital raise worth INR 1,374 crore through a rights issue. Existing shareholders get the chance to buy additional shares in proportion to their holdings. Warburg Pincus, which owns around 59% of the firm, will reportedly lead the round, alongside global heavyweights like IFC, Kedaara Capital, and Mubadala.
This rights issue marks a decisive shift from public to private funding, following the lapse of Avanse’s SEBI-approved IPO window. The earlier Avanse Financial Services IPO plan, cleared in October 2024, expired after 12 months without takeoff. This delay was influenced by external economic stress and falling demand for overseas education loans — a segment that forms the backbone of Avanse’s business.
Why the IPO Took a Backseat
Originally, Avanse had its eyes set on a blockbuster launch with an INR 3,500 crore Avanse Financial IPO – featuring a INR 1,000 crore fresh issue and an INR 2,500 crore offer-for-sale by current investors. Warburg’s affiliate, Olive Vine Investment, planned to offload INR 1,758 crore worth of shares, while IFC and Kedaara aimed to sell portions worth INR 342 crore and INR 400 crore, respectively.
But things took a turn in late 2024 when SEBI returned the IPO papers, citing non-compliance with Regulation 7(1)(a) of the ICDR Regulations. The company later corrected the issue and resubmitted its documents, but by then, global headwinds — like tighter US visa policies and cooling overseas education demand — made market entry less appealing.
Additionally, Avanse amended its internal structure to restore specific rights for its private equity investors. That move hinted that a public launch might not be on the cards anytime soon, even though live IPO GMP today trackers had initially shown strong investor interest.
Strong Growth Despite IPO Delay
Skipping the IPO hasn’t slowed Avanse down. The NBFC continues to show remarkable financial growth, signaling strong fundamentals even without a public listing. The company’s Assets Under Management (AUM) skyrocketed from INR 4,835.6 crore in FY22 to INR 13,303 crore in FY24, and further to INR 21,713 crore by September 2025.
Nearly 80% of Avanse’s loan book belongs to overseas education financing, dominated by countries like the US, UK, and Canada, which together account for 92% of its exposure. Most of its borrowers are postgraduate students — a group known for better repayment consistency, according to credit agency ICRA.
Here’s how its financial performance has evolved:
- Revenue: INR 989.6 crore (FY23) → INR 1,726.9 crore (FY24)
- Net Profit: INR 157.7 crore (FY23) → INR 342.4 crore (FY24) → Projected INR 508 crore (FY25)
- Net Margin: Grew from 12.4% in FY22 to 19.8% in FY24
- Return on Equity (ROE): Jumped from 6.5% to 12.8% in two years
- Debt-to-Equity Ratio: Improved from 4.06x (FY22) to 2.76x (FY24), showing disciplined leverage management
These metrics underline a resilient business model shaped around consistent growth and cautious financial strategy – even in volatile global conditions.
What the Rights Issue Means Strategically
This rights issue is more than just fundraising — it’s a signal. By opting for private capital instead of going public, Avanse is reinforcing its Tier-1 capital base, which helps mitigate risks and maintain regulatory strength. The move highlights how the company wants to sustain momentum in a changing global environment rather than chase short-term IPO gains.
For the education finance industry at large, this demonstrates a pivot toward internal strengthening. Overseas study trends have become unpredictable thanks to evolving visa norms and global politics, especially in Western countries. Hence, a stable approach like this gives Avanse breathing room to grow sustainably before revisiting its Avanse Financial IPO plans.
Analysts also believe the timing couldn’t be better. Private capital ensures flexibility and faster decision-making, while the company can still gauge investor sentiment through live IPO GMP today updates in the unlisted market. These signals often reflect how strong the brand’s equity story remains despite postponing its public debut.
The Road Ahead for Avanse Financial
With this move, Avanse proves that not every growth story needs an IPO to shine. The company’s consistent financial performance, growing AUM, and solid investor backing suggest it’s preparing meticulously for its next big chapter.
So while the Avanse Financial IPO might be off the table for now, market watchers are keeping a close eye on its future developments and Grey Market Premium activity. If the company continues on its current trajectory, Avanse could make a much stronger comeback to the public markets when conditions turn favorable.
