Avanse To Delay IPO Due To Strict US Visa Rules: Report

Education loan-focused NBFC Avanse Financial Services is reportedly weighing a delay in its planned initial public offering (IPO) amid slowing loan demand due to stricter US visa rules. 

A Bloomberg report, citing people close to the matter, said that the Mumbai-based lender might wait for the overseas loan market to improve before resuming work on the potential share sale.

“This seems to be an industry speculation about our organisation. As a practice, we do not comment on industry speculations,” an Avanse spokesperson said in a statement. 

However, the NBFC has not announced a revised timeline for its IPO. 

The US is a top destination for Indian students seeking higher education, and Avanse Financial’s loan portfolio is closely linked to those pursuing degrees overseas. 

Recent regulatory signals from US authorities on visa norms, including potential tightening and extended processing times, have raised concerns for Indian education loan providers. 

Avanse’s IPO Journey

The fintech startup filed the DRHP for its INR 3,500 Cr IPO in June last year. However, SEBI gave its nod to Avanse on its proposed IPO in October 2024. But the journey has seen some ups and downs. A month later, the market regulator returned Avanse’s IPO papers, citing “non-compliance with Regulation 7(1)(a) of SEBI ICDR Regulations, 2018.”

According to the above section, the issuer has to make sure that it has applied to one or more stock exchanges to seek an in-principle approval for listing of its specified securities on such stock exchanges and has chosen one of them as the designated stock exchange.

In August, the lender refiled its DRHP with the SEBI. 

It is pertinent to note that it has been 10 months since Avanse received the nod from SEBI for its IPO, and it has not yet filed its RHP for the IPO. According to SEBI norms, a company has a validity of 12 months after receiving an in-principle approval from SEBI and the stock exchanges for the IPO. 

Its INR 3,500 Cr IPO will comprise a fresh issuance of shares worth INR 1,000 Cr and an offer for sale (OFS) component of shares worth up to INR 2,500 Cr.

Avanse’s promoter group Olive Vine Investment, an affiliate of Warburg Pincus, is offloading shares worth up to INR 1,758 Cr, while International Finance Corporation (IFC) and Kedaara Capital will sell shares worth up to INR 342 Cr and INR 400 Cr, respectively.

As per the DRHP, Avanse reported a net profit of INR 342.4 Cr in the fiscal year 2023-24 (FY24) as against INR 157.71 Cr in the previous fiscal year. Meanwhile, operating revenue jumped nearly 2X to INR 1,726.9 Cr from INR 989.5 Cr in FY23.