Avanse Financial Services Mulls IPO Delay Amid US Student Visa Slowdown
Avanse Financial Services, an Indian education financing provider, is contemplating postponing its IPO due to declining loan demand caused by stricter US visa regulations. The company, which planned to raise 10 billion rupees ($115 million) through the IPO, is facing headwinds as student arrivals to the US from India dropped by 46% in July compared to the previous year. Avanse had submitted draft papers in July and received approval in October for the IPO, which was also set to include share sales from existing investors like Warburg Pincus and Kedaara Capital. Despite potential IPO delay, the company recently secured a $200 million multi-currency syndicated loan to diversify its funding sources.
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Avanse Financial Services Ltd., a prominent Indian education financing provider backed by Warburg Pincus, is reportedly considering postponing its initial public offering (IPO) in light of declining loan demand stemming from stricter US visa regulations.
Visa Challenges Impact Loan Demand
The Mumbai-based company, which offers financial assistance to students at over 1,650 educational institutions across approximately 50 countries, is facing headwinds due to a significant drop in US-bound student numbers. As of March, 57% of Avanse's international loan portfolio was directed towards students heading to the United States.
Recent data paints a concerning picture for education lenders:
- Student arrivals to the US from India plummeted by 46% in July compared to the previous year
- Total student visa arrivals to the US decreased by 28%, falling below 79,000
IPO Plans Under Review
The company had initially planned to raise about 10.00 billion rupees ($115.00 million) through its IPO. The offering was also set to include share sales worth approximately 25.00 billion rupees from existing investors, including:
- Warburg Pincus
- Kedaara Capital
- International Finance Corp.
Avanse had made significant progress towards its public listing, having submitted draft papers in July and received approval in October. However, the changing market dynamics have prompted a reconsideration of the timing.
Recent Financial Moves
Despite the potential IPO delay, Avanse Financial Services continues to strengthen its financial position. The company recently secured a $200.00 million multi-currency syndicated loan, a strategic move aimed at diversifying its funding sources.
As the education financing landscape evolves in response to global visa trends, Avanse's decision regarding its IPO timing will likely be closely watched by investors and industry observers alike.
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