Credila Financial Services, one of the largest providers of education loans to Indian students pursuing their studies overseas, is set to make its debut on the Indian stock exchange with an IPO of Rs 5,000 crore.

Investors should decide whether to participate in Credila Financial Services IPO based on the issue price, the company’s financials, anchor investors, industry growth, company’s market share, and other factors. Let us explore some of them.

On Friday, 27th, 2025, the company submitted its Updated Draft Red Herring Prospectus-I (UDRHP-I) to SEBI. While the issue size is available, the price band, issue opening date, and allotment dates are yet to be released.

Why is Credila Financial Services going public

Credila Financial, formerly known as HDFC Credila Financial Services Limited, is raising equity capital to increase its capital base and meet future capital requirements due to business growth and expansion. There is no Shareholder Quota in the Credila Financial Services IPO. HDB Financial Services Limited, the non-banking lending arm of HDFC Bank hit the primary markets recently.

However, investors should realize that the IPO’s entire issue size will not be used for business expansions. Credila Financial Services IPO will witness ‘fresh sale of equity shares’ of face value of Rs 10 per equity share, worth Rs 3,000 crore, while Rs 2,000 crore will be ‘Offer for Sale’.

Unlike the fresh sale of equity shares, under Offer for Sale, the existing shareholders ( promoters and others) offload their shares as part of the IPO offering.

IPO funds raised through the Rs 2,000 crore Offer for Sale will go to two entities – Rs 950 crores to Kopvoorn B.V. (Promoter Selling Shareholder) and up to Rs 1,050 crore by HDFC Bank Limited (Other Selling Shareholder).

Promoter of Credila Financial Services is Kopvoorn B.V., a private limited liability company incorporated under the laws of the Netherlands. Credila Financial’s pre-IPO placement, which will not exceed 20% of the fresh issue size, is expected to happen soon.

Credila Financial Services: Business

Indian students are increasingly exploring higher education opportunities in the US, UK, Canada, Germany, Ireland, Japan, Australia, and Singapore. Credila Financial, founded in 2006, is one of the most prominent education loan providers to Indian students for studying in India and for studying abroad.

Credila Financial primarily provides loans to students pursuing master’s programs in the science, technology, engineering, and mathematics domain, master’s in business administration, undergraduate programs, and students enrolled in diploma programs, professional degrees, certificate courses, and executive and technical programs.

Credila Financial Services: Financials

India has three education-focused NBFCs – Credila Financial Services Limited, Avanse Financial Services Limited, and Auxilo Finserv Private Limited. Credila is significantly dependent on HDFC Bank, which is their largest channel partner during the last three years.

Credila is the fastest-growing education-focused NBFC in India, with a 65% compound annual growth rate (CAGR) in net loans between 2023 and 2025 and an 84% rise in AUM between 2023 and 2024.

With a 47% year-over-year growth in net loans for the year ending 2025, Credila is the second-fastest-growing education-focused NBFC in India.

Credila’s major market is education loans for students studying abroad. As of March 31, 2025, all of the company’s loans were retail education loans, with students studying in India and overseas making up 5.35% and 94.65% of the total amount disbursed, respectively.

Interest on education loans is a major contributor to companies’ income, accounting for 88.14%, 91.49%, and 96.24% of the total income in the fiscal years 2025, 2024, and 2023, respectively.

Industry Numbers

The education market in India (both overseas and domestic), valued at approximately Rs 19,186 billion in 2024, is projected to grow at a 10–12% CAGR. This growth is led by higher education. About 18% of the market is made up of the foreign education sector, which is expected to be worth Rs 3,422 billion in 2024.

By 2029, it is anticipated to have grown at a quicker rate of 17–19% CAGR to reach Rs 7,500–Rs 8,000 billion. Growth drivers include rising aspirations, favourable immigration policies, global talent shortages, and a growing ecosystem of counsellors and financiers.

Formal loan penetration was approximately 10.5% in 2024. This penetration is expected to increase, with loan disbursements projected to grow at a 20–22% CAGR over the next five years, supported by NBFCs. NBFCs’ share in India’s outstanding education loan market has risen sharply from approximately 11% in 2021 to approximately 30% in 2024. It is projected to reach 43–45% by 2029.

The US, Canada, the UK, and Australia continue to account for approximately 76% of overseas student flow. Emerging destinations like Germany, Ireland, the UAE, and Singapore are gaining traction. Indian students constituted 26% of international students in 2024.

Credila’s 51.54% of AUM as of March 31, 2025, is focused on higher education in the United States. This is what the company perceives as a risk factor in the prospectus – “We are exposed to geopolitical, macroeconomic and visa and immigration policy-related risks in such jurisdiction, which could adversely affect our business, results of operations, financial condition and cash flows.”

“18.84% and 11.99% of our AUM as of March 31, 2025, through our overseas student loans business, is largely focused on higher education in the United Kingdom and Canada, respectively. This exposes us to geo-political and macro-economic risks in these geographies, which could adversely affect our business, results of operations and cash flows,” is what the company identifies as a risk factor.

Also Read: US enrolls record 1.58 million foreign students in 2024, 1 in 4 from India

Credila Financial Services IPO: Risk Factors

India’s number of students pursuing graduate and post-graduate studies in foreign countries reached 13 lakh in 2024, according to the Ministry of External Affairs data. The United States remains the most popular destination for international students, with Indian students accounting for over 25% of the over one million foreign students studying there.

However, in 2025, the Trump administration implemented measures to restrict study visas for foreign students, including halting appointment scheduling, increasing applicant scrutiny, and revoking existing visas. Certain universities have experienced a freeze in government funding.

Restrictions on international students studying in the US, changes to OPT programs, or reductions in H1-B work visas could negatively impact a company’s overseas student loans business.

The continuation of current policies or escalating anti-immigration actions in the United States could potentially discourage students from studying there, potentially negatively impacting Credila’s business.

However, outside of the Big Four, European countries like Germany, Italy, the Netherlands, France, and Sweden attract the most student interest, reports Studyportals. Relative interest in France, Austria, Ireland, and Spain has surged between 20 and 30% over the past year. Malaysia, Japan, China, and South Korea are gaining market share of student interest, as are the United Arab Emirates and South Africa.

Also Read: HDB Financial IPO: Everything you need to know about Rs 12,500 crore issue from HDFC Bank Group