In a significant development for the education finance sector, Auxilo, a leading non-banking financial company (NBFC) focused on education, has raised $12 million through a debt financing round. The funds were secured through the issuance of non-convertible debentures (NCDs) at a face value of INR 1 lakh each. This strategic move is aimed at enhancing Auxilo’s capacity to provide education loans to students and educational institutions, thereby supporting its mission to make quality education accessible to all.
Strengthening Financial Position
Auxilo’s recent debt financing round marks a crucial step in strengthening its financial position. The company issued NCDs worth INR 100 crore, attracting investments from prominent financial institutions such as Dezerv Securities, MAS Financial Services, and CredAvenue Securities (Yubi). The NCDs issued to MAS Financial and CredAvenue have a tenure of 36 months with an interest rate of 9.65%, while those issued to Dezerv have a tenure of 29 months with an annual coupon rate of 9.90%.
This infusion of capital will enable Auxilo to expand its loan portfolio and cater to the growing demand for education loans. By leveraging debt instruments, Auxilo can raise substantial funds without diluting its equity, thereby preserving shareholder value. The funds raised will be utilized to support the company’s growth initiatives and enhance its operational capabilities.
The successful completion of this debt financing round reflects Auxilo’s strong financial health and its ability to attract investment from reputable financial institutions. This move is expected to provide the company with the financial flexibility needed to navigate the competitive landscape and achieve its long-term objectives.
Expanding Reach and Impact
The funds raised through the issuance of non-convertible debentures will play a pivotal role in expanding Auxilo’s reach and impact. Since its inception in 2017, Auxilo has provided education loans to over 12,000 students across more than 1,100 universities and educational institutions in over 30 countries. With the additional capital, Auxilo aims to disburse INR 25,000 crore worth of loans to more than 150,000 students in the next five years.
Auxilo’s commitment to supporting education extends beyond student loans. The company also provides loans to educational institutions for infrastructure development and working capital requirements. This holistic approach ensures that both students and institutions have access to the financial resources needed to achieve their educational goals.
The strategic investments in expanding Auxilo’s loan portfolio are aligned with the company’s long-term vision of making quality education accessible to all. By leveraging the funds raised through NCDs, Auxilo aims to accelerate its growth trajectory and enhance its impact on the education sector. The company’s proactive approach to expansion and investment is a testament to its commitment to innovation and excellence.
Financial Performance and Future Prospects
Auxilo’s financial performance has been impressive, with significant growth in revenue and profitability. The company’s revenue from operations grew by over 2X year-on-year to reach INR 174 crore in FY23. Additionally, Auxilo reported a doubling of profits to INR 26 crore in FY23 compared to the previous fiscal year. This robust financial performance reflects Auxilo’s strong market position and its ability to deliver consistent growth.
Looking ahead, Auxilo is well-positioned to capitalize on emerging opportunities in the education finance sector. The company’s positive financial outlook is supported by its strategic initiatives and investments aimed at driving growth and enhancing operational efficiency. Auxilo’s focus on innovation, customer satisfaction, and market expansion positions it well for continued success in the future.
The issuance of non-convertible debentures is expected to further strengthen Auxilo’s financial position and provide the necessary capital to support its growth plans. The company’s proactive approach to fundraising and investment underscores its commitment to achieving long-term success and creating value for its stakeholders. As Auxilo continues to execute its strategic initiatives, it is well-positioned to maintain its leadership position in the education finance sector.
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