Money & Banking

Avanse Financial raises ₹357 crore via securitisation transaction

K. R. Srivats | | Updated on: Jan 28, 2022

Bag of fund and a hourglass on a laptop | Photo Credit: William_Potter

Transaction was facilitated by Northern Arc Capital

Avanse Financial Services Ltd, a new age education-focused non-banking financial company (NBFC), has raised ₹357 crore via securitization transaction from a global financial institution. This long-term funding is for a period of about 10 years. The transaction was facilitated by Northern Arc Capital (formerly IFMR Capital Finance).

This fund will be utilised to strengthen and fulfil Avanse’s mission of making education financing seamless and affordable for every deserving Indian student.

This funding is expected to support the expansion of Avanse Financial Services’ education financing program and thus, strengthen its leadership position in the lending space.

The organisation’s deep domain expertise, healthy portfolio and robust business strategy have enabled it to receive this long-term investment.

Amit Gainda, CEO, Avanse Financial Services said, “This is a significant milestone as it is the first securitisation transaction in the education loan space, invested by a global financial institution establishing this segment as an asset class at an international level. It has enabled us to boost our diversified long-term stable funding strategy. I believe this newly established relationship will grow multi-fold across different spectrums of financial services and will assist us in fulfilling students’ academic aspirations and strengthening the education infrastructure of the country.”

Education is an essential aspect of the Indian culture, and thus, it is a non-discretionary spend sector backed by favourable demographics and heightened awareness, he added. 

This makes education financing a sunshine segment and a multi-decade secular growth opportunity in India. This transaction demonstrates the investor community’s trust in Avanse Financial Services’ commitment towards democratizing education and education financing in India. 

Bama Balakrishnan, COO, Northern Arc Capital said, “We are pleased to structure, facilitate and co-invest in this notable securitisation transaction. Education financing is a bourgeoning segment in India, and we foresee several innovative models emerging in this space. Avanse has been an early mover, demonstrating consistent growth and making access to high-quality education a reality for thousands of students in India. At Northern Arc, we are committed to supporting businesses like Avanse that bring transformative impact and the latest transaction is a testament to that.”

Avanse Financial Services has so far fulfilled educational dreams of two lakh academic aspirants across 15,000 institutes and courses in 50 countries. It has also provided growth and working capital to 1,000 educational institutes catering to over 5-6 lakh students.

Published on January 28, 2022
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