Avendus Finance eyes Rs 20 bn lending from NBFC business this year

Avendus Finance, the non-banking finance company (NBFC) from the stable of KKR-backed Avendus Capital, is set to increase its lending portfolio to Rs 20 billion by the end of this financial year. 

It is also eyeing a five-fold rise in its overall asset base to Rs 100 billion in the next five years. The structured finance provider, which offers customised financing solutions in the form of growth capital, funds for acquisition, pre-IPO financing and project funding, among others, is also planning to enter the credit-starved small and medium enterprises (SME) segment in the near future.

“Our plan is to end this financial year with a total disbursement of Rs 20 billion. In the next five years, we are going to build a Rs 100 billion portfolio. This is the youngest business (Avendus Capital), which is less than 12 months old and we want to scale it up fast,” said Kaushal Aggarwal, co-founder and managing director of Avendus Capital.

US private equity giant KKR-backed Avendus Capital is planning to tap the bank financing route to fund its loan growth in the future. “In our NBFC, roughly $100 million (around Rs 6.5 billion) has been deployed. But soon, we will start raising money from banks as well. This will be deployed mostly as debt. Our clients comprise mainly businesses and business families, among others,” he said.

“KKR is the largest investor in Avendus. The money raised from KKR is now being used for lending purposes. But we will be requiring the money and be using borrowed fund for business growth,” Aggarwal added. Late last year, Avendus Capital raised Rs 9.80 billion from private equity firm Gaja Capital and KKR as the firm was ramping up its asset management and NBFC businesses.

KKR had acquired majority stake in Avendus for about $115 million way back in 2015. Post KKR’s acquisition, the company had diversified its operations to build a diversified financial services company.

Avendus, which has been ranked as a top notch player in the investment banking space, is also building up scale in the wealth management and asset management space. “A lot of our clients are ultra HNIs who are people having net worth of more than $10 million. That's the large focus area of the firm,” the co-founder said.

Recently, the company has joined race to buy IDFC Asset Management Company (AMC) in its bid to enter the fastest growing mutual fund market in India. IDFC MF was ranked number 12 in the pecking order with assets under management (AUM) at Rs 690 billion at the end of the June quarter. Out of this, around Rs 200 billion was in equities and the rest in debt.

Started in 1999 by three IIT alumni — Ranu Vohra, Gaurav Deepak and Kaushal Aggarwal, — Avendus Capital has emerged as a big player in the investment banking space in the last two decades, being a ‘go-to destination’ for start-ups raising funds. 

The firm had acted as an investment advisor for companies such as Swiggy, BookMyShow, TaxiForSure, Lenskart and Freecharge, among others, ever since 2011.