InCred Finance (InCred Financial Services Limited), one of India's leading diversified lending-focused NBFCs and Ola Money(Ola Financial Services), have announced a strategic partnership to provide seamless personal loan services to Ola users directly through the Ola app.

InCred Finance and Ola collaborate to provide personal loan services

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Avanse plays in a highly competitive market and locks horns with juggernauts like State Bank of India (SBI), Bank of Baroda, ICICI Bank, as well as NBFCs like HDFC Credila, Auxilo, and InCred, among others
As per its DRHP, Avanse is the second-largest education loan-focused NBFC in India, following HDFC Credila. Its total AUM stood at INR 13,303 Cr as of March 2024
Avanse’s FY24 PAT more than doubled YoY to INR 342.4 Cr and operating revenue jumped 74.5% YoY to almost INR 1,727 Cr
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With the new-age tech IPO season in its full bloom, after a lull of almost two years, Avanse Financial Services has emerged as the latest entity to have filed for a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). Backed by marquee names such as Kedaara Capital, Warburg Pincus, Mubadala Investment Company and Avendus, the education loan-focussed non-banking financial company (NBFC), Avanse, is aiming to raise INR 3,500 Cr through its public listing . Its IPO would comprise a fresh issue worth INR 1,000 Cr and an offer for sale (OFS) component of shares worth INR 2,500 Cr. With its IPO, Avanse will contribute to over INR 1 Lakh Cr of IPOs expected to happen in the country this fiscal. The draft document for its IPO, filed in June this year, is under SEBI’s review, along with the DRHPs of other new-age companies like non-banking lender Northern Arc and fintech startup Mobikwik. After the mainboard public listing of TBO Tek, Go Digit, Awfis, and ixigo, listings of several other new-age tech startups are also in the pipeline, including Ola Electric and FirstCry. Meanwhile, taking the confidential route, Swiggy has filed its IPO papers with SEBI. With such major brand names in the pipeline for this year’s IPO, let us delve deeper into Avanse’s business model, competition, and books to gather some understanding about the prospects of its impending public market debut. Though the market is bullish on the new-age tech companies and has largely shown a positive response to the recent listings, a few trends have emerged — the market’s affinity for certain differentiating factors in the IPO-bound companies, decent valuations that match with the other market leaders, and strong fundamentals of companies planning to walk down the IPO aisle. Avanse In The Education Loan Market
In the Indian education loan market, Avanse offers full-stack education financing options — from education loans for students to growth capital for education institutions through education infrastructure loans. As an education-focussed NBFC operating in India, Avanse plays in a highly competitive market and locks horns with juggernauts like State Bank of India (SBI), Bank of Baroda, ICICI Bank, as well as NBFCs like HDFC Credila, Auxilo, and InCred, among others. Although banks continue to dominate the realm of education financing, NBFCs have started securing a notable portion of the education loan market, particularly in the overseas student loans segment, as the demand for student loans is on the rise. As per a CRISIL report, 88% of the NBFC portfolio comprised overseas education loans as of December 31, 2023. When compared with banks, the NBFCs comprised 37% of the total overseas education loans market in India during the same time. As one of the leading NBFCs in the student credits market, Avanse wants to cash in on this very opportunity, as it is expected to grow sharply over the years on the back of an expanding student pool in the country, limited prestigious university seats locally, and a rising preference among students for global exposure, the report suggests. Now, why NBFCs are excelling in the overseas market compared to banks? Well, the answer to this lies in the risk-taking appetite of NBFCs when it comes to offering unsecured loans. Unlike NBFCs, Indian banks have a higher share of small-ticket education loans in their education loan portfolio as the central bank (RBI) does not mandate security or guarantee for loans up to INR 4 Lakh. Also, banks have slightly lower interest rates compared to NBFCs, making them an easier choice, especially when no collateral is needed. RECOMMENDED FOR yOU
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In contrast, NBFCs focus more on higher-ticket sizes, above INR 10 Lakh, allowing them to corner a majority share of the overseas education loan space. Speaking with Inc42, Nilanjan Chattoraj, head of credit and product, education loans at InCred Finance, explained that when the education loan model started in India in the early 2000s, the only providers of those credits, the banks, asked for property collateral or a mortgage to give higher ticket loans. HDFC Credila, over the last 15 years or so, ushered in the biggest change in this game with high ticket-size unsecured loans, particularly enabling the students opting for higher education in foreign countries who might not be able to show property collateral given various socio-economic backgrounds, he said. “With that being the starting point, one of the reasons that NBFCs started getting popular in the education loan space is the product fitment brought by these specialised players, which the public sector banks were not able to do,” Chattoraj added. “Besides, the student lending product is inherently a completely different model compared to other financing products, such as a consumer loan or a home loan or a business loan… so understanding which colleges and courses are to be funded and which are to be avoided to minimise the risks of NPAs in the future is extremely important and banks being a multi-product company, it’s difficult for them. And that is exactly how NBFCs have become a popular choice in this market,” he said. A Close Look At Avanse’s Fundamentals
According to the company’s DRHP, Avanse is the second-largest education loan-focused NBFC in India by assets under management (AUM), as of March 2023 and March 2024, following HDFC Credila. Avanse’s total AUM stood at INR 13,303 Cr as of March 2024. However, compared to its closest competitors, Avanse has the largest average ticket size for international student loans at around INR 33 Lakh. According to the CRISIL report , while HDFC Credila and Auxilo – the two closest competitors to Avanse in the NBFC education credits space – primarily focus on education loans, the latter (Avanse) is a multi-products educational loan NBFC. Notably, overseas student loans form 78.28% of its lending book, and the remaining comprises education institution loans and domestic education loans. As of March 31, 2024, its overseas student loans had a total AUM of around INR 10,414 Cr while for domestic it stood at INR 361 Cr. According to the founder and CEO of Wright Research, Sonam Srivastava, the education loans segment is booming, plus Avanse’s profitability factory is good and continues to increase. Given these factors, the company is expected to receive strong interest from the market. “Demand for educational loans, especially for foreign schools, has grown and people’s discretionary spending is increasing. Besides, people are expecting interest rate cuts by September. If this happens, it would bring a lot more attention to banks and NBFC. So, good days are incoming for NBFCs,” Srivastava said, adding that Avanse’s tech capabilities and usage of data analytics is the bow that ties everything together for the NBFC. Meanwhile, it is important to note that Avanse is a profitable entity. In FY24, its PAT more than doubled to INR 342.4 Cr from INR 157.7 Cr in the previous fiscal year. A testament to the growing market opportunity and its significant share in it, the company also has a steady revenue stream. Avanse’s operating revenue jumped 74.5% year-on-year (YoY) to almost INR 1,727 Cr in FY24. Its interest income, which primarily comprises interest on loans to its customers and interest on its investments and deposits held with banks, surged 61.6% YoY to INR 1,443.7 Cr in the same fiscal. If compared with the leading NBFC in this market, HDFC Credila’s PAT stood at INR 528.8 Cr in FY24 growing from INR 276 Cr a year ago. The gross non-performing asset (GNPA) ratio of Avanse stood at 0.43% as of FY24. The GNPA ratio highlights the asset quality of the lending companies. However, it is also important to note that the Indian education loan market has faced significant difficulties in recent years amid a widespread crisis in the edtech sector. Meanwhile, GNPAs in the overall education industry are also expected to remain high due to this very reason. Also, as per sectoral experts, education loans with ticket sizes less than INR 4 Lakh have been witnessed to have higher NPAs. What’s Ahead For Avanse
Since its inception in 2013, Avanse has experienced significant highs and lows. It was initially established as a joint venture between the International Finance Corporation (IFC) and housing finance firm DHFL. Amid the DHFL crisis, the company sold its stake in Avanse Financial to Warburg Pincus Group. Currently, Olive Vine Investment, an affiliate of Warburg Pincus, is the largest shareholder in Avanse with a 58.38% stake. As part of the OFS, promoter group Olive Vine Investment will offload shares worth INR 1,758 Cr. IFC, which holds an 11.36% stake, will sell shares worth INR 342 Cr and Kedaara Capital will offload a 13.82% stake in the company worth INR 400 Cr. With an already strong foothold in the education loans sector, Avanse aims to use the primary capital of INR 1,000 Cr from its IPO to augment its capital base to meet our company’s future capital requirements arising on the back of business growth and growth of assets. Overall, Avanse is well-positioned to capitalise on the rapidly expanding Indian education finance market, leveraging its strong product portfolio, extensive distribution network, and the support of its marquee investors as it prepares to walk down the IPO aisle.

Decoding Warburg Backed Avanse’s Stronghold In The Student Loan Market Ahead Of Its INR 3,500 Cr IPO

Hurun Future Unicorn 2024: The Next Big Players In Making
Hurun Future Unicorn Index 2024 was recently published, showcasing where India stood regarding startups. With several new faces coming up as the unicorns of the year, many startups achieved the privilege of being on top of the list. Unicorn is a term entitled to any venture that surpasses a valuation of $1 billion, an esteemed title indeed, especially in developing countries like India. It was in the early 2010s when Alien Lee popularised the term because he found it magical, as he puts it. The Hurun Future Unicorn Index 2024 is driven by the purpose of bringing into light the growing economic market of India, the new and vibrant startup ecosystem that is laid in the Indian economy, and to bring out these features and findings for the world, government, and entrepreneurs to witness. It studies and analyses the rapidly growing startup culture and groups them into categories like Unicorn—companies started in the 2000s with a current valuation of $1 billion; Gazelles—companies that are likely to achieve the title of Unicorn in the next three years; and Cheetah—companies expected to reach the title of Unicorn within a margin of 5 years. This evaluation of the Indian startup ecosystem has led to mixed feelings in the minds of Indian entrepreneurs and anyone who finds interest, as it didn’t just showcase the newcomers in the league; it also put forth a clear indication and graph as to where Indian startups and businesses stand in the sense of the challenges that are also coming as they rise. Currently, India is home to 67 startups that will become Unicorns shortly and is expected to add at least 152 shortly, with Unicorns rising from over 31 cities all across the country. The year’s top three companies to receive the most positions in The Hurun Future Unicorn Index 2024 were Peak XV Partners, with 47 investments made, followed by Accel and Tiger Global Management with a total of 25 and 21 investments, respectively. Peak XV Partners
Formerly known as Sequoia Capital India, it was founded in 2000 and is currently a leading venture capital firm specialising in early and growth-stage investments. Since its birth, it has been a major player in the Indian economy and goes by the motto of investing and encouraging new startups if they do have potential. According to the ASK Private Wealth Hurun India Future Unicorn Index 2024, Peak XV Partners is the top investor in Indian startups, with investments in 47 companies, including notable startups like Turtlemint, CleverTap, and Classplus. Their investments have played a significant role in driving the companies in which they invest, supporting their growth through strategic investments and guidance leading to a greater goal, and this reflects the importance of the firm in the Indian ecosystem of startups and businesses. They have been proactive in their investment strategies, and with the robust portfolio they have created over the years, they have cemented their position and played a crucial role in fostering innovation and shaping the future of the Indian economy. Peak XV is an investor in 70 per cent of India’s unicorns. Accel
Standing second in the list, Accel is also a venture capital firm, with investments in over two dozen companies (25), and has established itself as one of the top Indian startups next to the title of Unicorn. Atoms, the company’s accelerator programme, nurtures new startups, guides them in their journey, and lays focus on identifying these startups with high potential. Through this, they secure their stake in the company. Just like Peak XV Partners, Accel stands as a crucial venture that is helping crucially high-potential startups as they grow. Tiger Global Management
Founded in 2001, Tiger Global Management has made investments in 21 companies that are expected to become the next generation of unicorns. Going by this alone, it is indeed exciting news that Indian startups are building and developing at such a good rate; however, if we study wisely and analyse the growth per year, there is an indication of a slowdown, an economic slowdown. Studying data from the previous two years, we can see that, in 2024, only 10 startups achieved the status of Gazelles from being former Cheetahs, as compared to 9 in 2023 and 12 in 2022. A single startup has achieved the title of Unicorn, raising it from the group of Cheetahs, as compared to the 7 startups in 2022 that rose from Cheetah to Unicorn, and only 2 rose from being Gazelles to Unicorn as compared to the 17 in 2022. The Unicorns of the year were Zepto, which achieved the title of Unicorn last year in August; fintech firm InCred Finance, achieving the title in December 2023; Perfios; Krutrim; and logistics platform Porter, which became a startup in May 2024, so very recently, joining the already present startups in the league. Zepto
Founded in 2020, it has been one of the fastest-growing ventures. With their promise to deliver in 10 minutes and the variety they provide, they’ve very quickly grown to high strata while also achieving the title of a unicorn. For any such grocery delivery company to blow up, there are several things needed, like a significant investment in infrastructure, setting up a supply chain network, and getting connections from warehouses. Zepto has adopted the Hub-Spoke Model, and it has proved good; the setting up of micro warehouses and dark stores has made it possible to dispatch any order within minutes; and the localised options available have also increased the customer ratio. InCred Finance
Set up in 2016, InCred became the second unicorn on the year’s list. It is a non-banking financial services company, providing loans and SME lending. InCred Finance has a loan portfolio exceeding Rs 7,500 crore, with a 50% annual growth rate over the past three years. Its profit before tax was Rs 42 crore in FY22 and increased to Rs 203 crore in FY23. According to Statista, digital lending is one of the fastest-growing fintech sectors in India, expanding from $9 billion in 2012 to nearly $150 billion in 2020 and projected to reach $350 billion by 2023. A report by IIFL Infotech earlier this year estimated that India’s digital lending market will hit $515 billion by 2030. With their new-age technology and data science, they have accelerated the process of lending. InCred has proved that new-age financial services platforms are the future of lending. Porter
The Bengaluru-based logistics service provider was set up in 2014, becoming the latest unicorn of the year. Porter functions as a delivery operation for businesses as well as individuals by providing them with on-demand light commercial vehicles. They provide services for the transportation of goods. While there was an overwhelming achievement to witness as these companies are the next generation of unicorns in the country, there was some disappointment as we saw a drop in several companies. With 25 Indian startups dropping from the list over the year and only a few new unicorns emerging, it is inevitable not to notice how various factors like the regulatory framework and the challenges caused by geopolitical reasons have affected the startups in India. Renowned companies Gaana, Koo, Rapido, Paper Boat, Dunzo, and DotPe were missing from the list of Future Unicorns, further proving the existing challenges that have haunted the startup ecosystem. Stricter regulations on non-banking financial companies (NBFCs)   and increased scrutiny on the online lending of money have had an impact on fintech startups. Several challenges come up with securing findings and achieving sustainability, which has caused several companies to drop off. However, even after all these hurdles, startups in India have come a long way, and as stated above, there is still potential in the upcoming startups as they lead the Indian ecosystem. Unicorns have had a multifaceted impact on the economy, as they play a crucial role in job creation. With their firms and their connections through the supply chain network that they are a part of, they create various job opportunities, both directly and indirectly. The growth of unicorns attracts investors, both domestic and international, leading to a more adequate flow of capital. Not just this, with new ventures coming up, there has been a shift in the traditional idea of industry. New unicorns, gazelles,  and cheetahs bring forth new and innovative frameworks for companies, and they also adapt to new trends like artificial intelligence, blockchain, and data analytics. Unicorns in India have exemplified and powered the startup ecosystem’s entrepreneurial drive and potential. They are all set to revolutionise industries, challenge traditional ways, address societal challenges, fuel economic growth, and generate more job opportunities for the youth and eligible. Despite the challenges thrown at them—regulatory obstacles, geopolitical challenges, and fierce competition—startups in India have achieved a major gain, not just in their valuation but in their popularity. Tags

Hurun Future Unicorn 2024: The Next Big Players In Making

InCred Finance's total assets under management stood at Rs 9,039 crore, a 49.1% jump from Rs 6,062 crore in FY23.

InCred Finance's profit more than doubles to Rs 316.3 Cr in FY24

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We'll soon meet in your inbox. Hi, this is Digbijay Mishra in Bengaluru. Welcome to another edition of ETtech Unwrapped — our weekend newsletter. Quick commerce, the buzziest sector in the consumer internet industry, is undergoing a significant transformation. We at ETtech have been tracking the sector super closely and bringing the biggest and most impactful stories to you, first. And as the lines blur between legacy horizontal ecommerce players and ultra-fast commerce platforms, we feel it’s an inflection point for the nascent sector. We will writing about this new phase. This week, we had two important stories capturing the critical shifts underway in this space:
Here’s the breakdown and top takeaways from these stories:
Quick-commerce platforms are expected to encounter hurdles as they aim to strive to strike a balance between operational efficiency and profitability. The imminent challenges have been starkly apparent even more after sector leader Blinkit announced an aggressive target of having 1,000 dark stores by March 2025. Ecommerce has always been about execution of supply chain and logistics, and when the timeline is shorter the challenges are bound to be bigger. While delivering groceries and staples has largely been figured out by the rapid-delivery companies, it won’t be the same to ship products in other categories. Keeping the unit economics issue aside for a moment, the latest challenge – to carry a wide range of goods, in various sizes – would be be tough, given they can’t all be stored in small dark stores. Sahil Barua, CEO of logistics firm Delhivery, said in an earnings call on Friday that a sub-segment of quick commerce involving two to four-hour deliveries could emerge where large ecommerce marketplaces like Amazon and Flipkart will have a play. Q-commerce edge: Consumer goods companies such as Hindustan Unilever (HUL), Dabur, Adani Wilmar and Parle Products have said the contribution of quick commerce to overall ecommerce sales rose as high as 35% in FY24, almost doubling in a year. Here are the other top stories of the week. Top Stories By Our Reporters This Week
Kalyan Krishnamurthy, CEO, Flipkart
Flipkart maps India redux; talks on to shift domicile from Singapore: Flipkart has begun active discussions to move its domicile back from Singapore to its country of origin, said people aware of the matter. The 17-year-old company is the country’s biggest consumer internet firm with a foreign domicile. Mizuho is in talks to buy KKR’s part stake in fintech company InCred: Japan’s Mizuho Financial Group has held talks to pick up a stake in InCred Finance by buying a part of KKR’s stake in the financial services unicorn at a premium to its last valuation of $1.2 billion, multiple sources said. VC funding for women-led startups declined in 2023: report | Venture Capital (VC) funding for women fell to 9.3% in 2023 from 14.7% in 2021 , with female founders in India receiving less than 10% of funding in the year, trailing Europe, and the US, according to the 2023 annual report of WinPe. Earnings Corner
Sahil Barua CEO Delhivery
Delhivery back in red for Q4; CEO Sahil Barua flags softness in online consumption | Logistics firm Delhivery slipped back into the red in the March quarter with a net loss of Rs 68 crore. The Gurgaon-based company had reported a profit after tax of Rs 12 crore in the December quarter. Zomato logs fourth straight quarter of profit at Rs 175 crore: Food and grocery delivery company Zomato reported a fourth straight quarter of net profit compared with a loss a year earlier. Operating revenue grew 73% to Rs 3,526 crore, mainly driven by quick-commerce business Blinkit
Naukri parent Info Edge Q4 revenues up 9% to Rs 657.4 crore: Info Edge India reported a Rs 60.4 crore profit attributable to equity holders on a consolidated basis for the fourth quarter, compared with a loss of Rs 272.8 crore a year earlier. IPOs In Focus
Digit Insurance IPO's retail portion fully subscribed: Go Digit General Insurance launched its Rs 2,615 crore initial public offering (IPO) on Wednesday. It saw the retail portion of the issue getting fully subscribed on Day 1. The IPO, priced between Rs 258 to Rs 272 per share, will close on Friday. Evaluating the right time for Flipkart IPO: Walmart International CEO | Kath McLay, president and CEO, Walmart International, said the company is evaluating the right time for taking Flipkart public. Awfis sets Rs 364-383 price band for IPO: Flexible workspace solutions provider Awfis Space Solutions on Thursday announced a price band of Rs 364-383 per share for its initial public offering, scheduled for launch on May 22. At that price, the total proceeds from the IPO would be between Rs 576 crore and Rs 599 crore. Fintech Updates
UPI growth 2.0: Efforts on to crack DBT code | The Reserve Bank of India and banks are looking to get beneficiaries of the government's direct benefit transfer (DBT) schemes to do their routine transactions on the Unified Payments Interface (UPI) platform, in a bid to make more people transact digitally instead of cash. Fintech regulations to help those who follow rules: QED’s Nigel Morris | Increased regulation in the Indian fintech sector will significantly benefit the industry by driving away bad actors and enhancing the competitive advantage of those who abide by the rules, Nigel Morris, managing partner, QED Investors told ET in an exclusive interview. People movement
Ola CFO Kartik Gupta steps down two weeks after CEO exit: Kartik Gupta, chief financial officer (CFO) of ride-hailing major Ola Cabs, has exited the firm , just over two weeks after chief executive Hemant Bakshi stepped down . His exit is part of an ongoing restructuring at Ola Mobility, a company spokesperson told ET. In another set of top deck changes, the company is bringing back Ankush Aggarwal , brother of founder Bhavish Aggarwal, at the ride-hailing business after his stint with the electric scooter maker Ola Electric. Wipro’s COO Amit Choudhary resigns; Sanjeev Jain appointed as successor: Wipro's chief operating officer Amit Choudhary stepped down from his role on Friday. The IT major appointed Sanjeev Jain as the chief operating officer effective immediately. IT News
Indian IT’s reliance on H-1B dropped 56% over past 8 years: India’s top seven IT services companies saw a 56% decline in their usage of the premier US work visa programme – H-1B – over the last eight years, data accessed by ET show. IT midcaps weather market storm to enter billion-dollar club: Despite a challenging environment with slowing demand in the $250-billion Indian IT industry, four smaller IT firms in the country have entered the billion-dollar revenue group over the last five quarters. IT sweats to eke out margins on pricing squeeze, staff costs: Competitive deal pricing, rising staff budgets, and mounting pressure to expand revenues amid a global budget crunch have combined to hurt FY24 operating margins at Indian outsourcing companies, with only market leader Tata Consultancy Services (TCS) bucking the trend.

Quick commerce 2.0, and other top tech &amp; startup stories this week

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InCred Finance was formed from the merger between KKR’s non-bank lending business KKR India Financial Services (KIFS) and InCred Financial Services, the retail and MSME lending business of InCred in 2021.

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