Avanse Financial Services, the Indian education finance platform backed by Warburg Pincus, is reportedly considering postponing its planned INR10bn ($115m) initial public offering, amid weakening demand in the overseas education lending segment due to tightening US student visa regulations, according to a report by Bloomberg.
According to sources familiar with the matter, the Mumbai-based lender may defer the listing process until conditions in the international loan market stabilise. While discussions are ongoing, no definitive decision has been reached. Avanse and Warburg Pincus both declined to comment.
The IPO was also expected to include a secondary offering of shares worth approximately INR25bn from existing stakeholders, including Warburg Pincus, Kedaara Capital, and the International Finance Corporation (IFC). Draft papers were filed with India’s markets regulator, SEBI, in July 2024, with approval granted in October.
Avanse, which provides education loans to students across 1,650+ institutions in nearly 50 countries, has significant exposure to the US student market. As of March 2024, 57% of its international loan portfolio was tied to students pursuing education in the US, according to its prospectus.
However, recent policy shifts by the US government – characterised by stricter immigration enforcement – have led to a sharp decline in student visa issuance. Data from the International Trade Administration indicates a 46% year-on-year drop in Indian student arrivals in July, contributing to a 28% decline in total student visas issued during the same period.
Despite the macro headwinds, Avanse continues to strengthen its capital base. The company recently closed a $200m equivalent multi-currency syndicated loan, aimed at diversifying its funding mix and expanding relationships with both domestic and international lenders.
Warburg Pincus acquired a controlling 80% stake in Avanse from Wadhawan Global Capital in 2019. IFC was an early backer, investing in 2013, while Kedaara Capital joined the investor consortium in 2023.
