Startup Deep Dive : Auxilo Finserve — the unsecured education lender with a Rs 4,875 crore book and 0.08% bad loans

On 25 March 2020, the day India’s economy shut its doors for the pandemic, ICICI Bank signed the papers to buy a stake in a little-known education lender called Auxilo Finserve. Five and a half years later, that non-banking finance company’s loan book stood at ₹4,875.60 crore ($508 million) as of 30 September 2025, built almost entirely on loans with no collateral, handed to teenagers and their families betting on a degree overseas.

Here is the contradiction worth sitting with: a lender that bets on unsecured debt to fund strangers’ foreign degrees reports a net non-performing asset ratio of just 0.08% as of September 2025, on a book where barely one loan in ten carries any security at all. How a company this size gets away with that, and what happens if it stops, is the rest of this piece.

Quick facts

What they do

Auxilo Finserve is a Mumbai-headquartered, RBI-registered non-banking finance company that lends money for education rather than taking deposits. Its core product is the unsecured loan a middle-class Indian family takes out to send a child to a master’s programme in the United States, Britain or Canada, an amount that can run to ₹2 crore and that most public-sector banks will not touch without property as security. Alongside that, Auxilo lends working capital and infrastructure money to schools and colleges, and, since 2022, funds shorter vocational and skilling courses through a tie-up with the National Skill Development Corporation. As per CARE Ratings’ November 2025 assessment, higher-education loans to individual students make up 96.41% of its ₹4,875.60 crore loan book as of 30 September 2025, with institution loans and skill loans filling the rest.

The origin

The insight behind Auxilo was not a piece of technology; it was a gap in India’s banking rulebook. Under the industry’s own IBA model education loan scheme, a bank can lend up to ₹7.5 lakh against no collateral at all, backed by a government credit guarantee. Push past that threshold, which almost every serious overseas master’s programme does within its first semester’s tuition, and the borrower is generally asked for property, fixed deposits or other tangible security. For a family without a spare flat to mortgage, that rule alone can decide whether a child studies abroad at all.

Akash Bhanshali, a chartered accountant who runs the principal investments arm of Enam Holdings, and Balrampur Chini Mills Limited, India’s second-largest integrated sugar manufacturer, saw the same gap that had already built a market for rival lender Avanse: underwrite the student’s future earning power, not the family’s real estate. They incorporated the vehicle as Stellenyak General Finance Private Limited on 4 October 2016, secured its NBFC licence from the Reserve Bank of India on 3 May 2017, rebranded it as Auxilo, and put an outsider in charge of running it: Neeraj Saxena, who had already built Avanse’s education-lending book and had prior stints at DHFL, Trent and EY. The company began disbursing loans in October 2017, with FY19 as its first full year of operations, according to CARE Ratings’ company history.

The struggle years

Auxilo’s first real test arrived within three years of launch, and it came from outside India entirely. When the pandemic shut national borders in 2020, the entire premise of the company’s book, students physically travelling abroad to study, stopped making sense overnight. The numbers from that period, as filed with CARE Ratings, are unsentimental: Auxilo’s net interest margin fell from 7.97% in FY20 to 6.52% in FY21, as disbursements slowed and the processing fees that ride along with them dried up. Return on total assets, already thin at 0.68% in FY20, only recovered to 1.49% in FY21, still a fraction of what a mature NBFC would post.

The institution-lending side of the book, loans to the schools and colleges themselves, took the harder hit. Campuses shut, fee collections stalled, and Auxilo had to restructure ₹17.73 crore of loans under the Reserve Bank’s two COVID resolution frameworks, of which ₹16.97 crore, or 2.68% of its entire assets under management, was still outstanding as of 30 September 2021. The company additionally extended around ₹18 crore under the government’s Emergency Credit Line Guarantee Scheme to keep stressed institutional borrowers afloat. Growth nearly stalled with them: assets under management moved from ₹470 crore as of 31 March 2020 to just ₹632 crore by 30 September 2021, a year and a half of near-flat scale for a company that needed growth to justify its cost base.

• FY20 return on total assets: 0.68%, among the weakest years in the company’s history (CARE Ratings, January 2022)
• FY21 net interest margin fell to 6.52%, down from 7.97% in FY20, as disbursements slowed (CARE Ratings, January 2022)
• ₹16.97 crore of loans under COVID restructuring outstanding as of 30 September 2021, concentrated in education-institution loans (CARE Ratings, January 2022)
• AUM growth nearly froze: ₹470 crore (31 March 2020) to ₹632 crore (30 September 2021) while overseas travel was restricted

What kept the company solvent through this stretch was not the lending book, it was the promoters’ willingness to keep writing cheques. Bhanshali and BCML had already put in ₹315 crore of equity capital between 2017 and September 2021, according to CARE Ratings, giving Auxilo a gearing ratio of just 0.87x and a capital adequacy ratio above 51% at a moment when a leaner NBFC would have been forced to shrink its book or raise expensive emergency debt.

The turning point

The single event that set up Auxilo’s next five years happened in the same week the country locked down. On 25 March 2020, ICICI Bank signed definitive agreements to subscribe to 3,40,62,153 equity shares in Auxilo Finserve for ₹51.09 crore, buying a 9.8-9.9% stake and diluting Balrampur Chini Mills from a 50% holding to 45.05%, as reported by Business Standard and confirmed in CARE Ratings’ subsequent filings. It was, on its face, an odd moment for India’s largest private bank to back a three-year-old lender whose entire business depended on students crossing borders that had just closed.

The bet paid off once travel resumed. On one side of that ledger sits the company ICICI backed: AUM of ₹470 crore, a NIM sliding toward 6.5%, and a rating agency openly worried about a single-asset-class NBFC with an unseasoned book. On the other side, five and a half years later, sits AUM of ₹4,875.60 crore as of 30 September 2025, a compounded annual growth rate of roughly 78% in the three years to FY25, and a CARE long-term rating that had climbed from CARE A- in early 2020 to CARE A+ by late 2025. ICICI Bank’s continued presence as a shareholder also gave Auxilo something more valuable than capital: a signal to other private banks that it was safe to lend to, which shows up later in how the company funds itself.

The money behind it

Auxilo has never run a conventional venture-funding playbook of headline valuations and marquee term sheets. Its capital has come in structured tranches from a mix of strategic promoters, a large private bank and specialist private-equity funds, most of it un-trumpeted until rating agencies disclosed the numbers.

• Founding promoters (2017 onward): Akash Bhanshali, via family investment vehicle ELME Advisors LLP, and Balrampur Chini Mills Limited jointly infused roughly ₹350 crore in total since inception, and still hold 29.99% each on a fully diluted basis as of September 2025 (CARE Ratings, November 2025)
• ICICI Bank (25 March 2020): Invested ₹51.09 crore for a 9.8-9.9% stake, the vote of confidence that arrived the same week India’s pandemic lockdown began, and remained an investor through the FY24 round (Business Standard, March 2020; PR Newswire, July 2023)
• Tata Capital Growth Fund II, Trifecta Leaders Fund I, Xponentia Opportunities Fund II (July 2023): Led a ₹470 crore primary equity round alongside existing investor ICICI Bank, explicitly to expand the loan base and product range (PR Newswire, July 2023; Trilegal, 2023)
• Jade Inclusion Limited, an entity of LeapFrog Investments, with Trifecta and Xponentia (FY25): Infused a further ₹250 crore, ₹14.25 crore and ₹34.79 crore respectively, close to ₹300 crore in total, as Auxilo onboarded its first dedicated impact investor (CARE Ratings, November 2025)

The effect of two funding rounds in quick succession was a sharp change in ownership. Bhanshali and BCML’s combined fully diluted stake fell from 87.80% as of March 2023 to 59.98% by 31 August 2024, and has held near there since, per CARE Ratings. A latest-round valuation has not been disclosed by the company or reported by any source this piece could verify, so it is left out here rather than estimated. What is on record is the credit market’s verdict on the balance sheet those rounds built: CARE Ratings and CRISIL both carry Auxilo at A+/Stable on its long-term debt and A1+ on its commercial paper, CRISIL having upgraded the company from A/Positive as recently as 30 March 2024.

How it makes money

Strip away the education branding and Auxilo runs the oldest business in finance: borrow at one rate, lend at a higher one, and try to keep what slips through the cracks to a minimum. Nearly all its revenue is interest income and loan processing fees, and nearly all its costs are the interest it pays on its own borrowings.

• Where the revenue comes from: interest and processing fees made up ₹338.2 crore of Auxilo’s ₹356.68 crore total revenue in FY24, or 94.8% of the total (Entrackr, August 2024)
• Where the money goes: interest paid on Auxilo’s own borrowings was ₹168.49 crore in FY24, or 61.35% of total expenses, up 144.58% year-on-year as the book scaled (Entrackr, August 2024); employee costs added a further ₹41.76 crore
• The efficiency gain: cost per rupee of revenue improved from ₹0.90 in FY23 to ₹0.77 in FY24, and EBITDA margin rose from 70.48% to 79.91% over the same period, as fixed costs like technology and underwriting staff were spread over a bigger book (Entrackr, July 2023 and August 2024)
• The number that actually matters: return on total assets, the real test of an NBFC’s profitability once funding costs and provisioning are counted, moved from 2.61% in FY24 to 2.73% in FY25, then eased to 2.42% (annualised) in the first half of FY26 as credit costs rose slightly (CARE Ratings, November 2025)

This is the part people tend to get wrong about a business like Auxilo’s: a headline EBITDA margin near 80% looks like a software company’s economics, but it is not the real profit line. Most of that EBITDA is committed to servicing the debt Auxilo itself borrowed to fund its loan book, which is why the return that actually belongs to shareholders, ROTA, sits closer to 2.5%, in line with any well-run specialist NBFC and nowhere near the glamour the margin figure implies. The second surprise is on asset quality: only 9.81% of Auxilo’s loans are secured as of September 2025, yet gross non-performing assets sit at 0.55% and net NPAs at 0.08%, a result CARE Ratings attributes largely to a mandatory co-borrower requirement, where an earning family member is jointly liable on nearly every loan.

The numbers

Figures below are standalone financials as reported to and cited by CARE Ratings and Entrackr from Auxilo’s Registrar of Companies filings, in ₹ crore.

• Revenue grew 105% in FY24 and a further 48.3% in FY25 (Entrackr, August 2024 and September 2025)
• Net profit rose 169% in FY24 (2.5 times FY23) and 62.3% in FY25 (Entrackr, September 2025)
• AUM compounded at roughly 78% a year over the three fiscal years to FY25 (CARE Ratings, November 2025)
• Tangible net worth rose from ₹982.57 crore in FY24 to ₹1,387.49 crore in FY25 to ₹1,448.34 crore as of 30 September 2025, largely on fresh equity plus retained profit (CARE Ratings, November 2025)

Where the money comes from

Auxilo’s book is deliberately narrow by course type and dangerously narrow, in a rating agency’s eyes, by geography. As of 30 September 2025:

• By loan segment: higher-education loans to individual students, 96.41% of AUM; loans to education institutions, 3.42%; skill-development loans, 0.17% (CARE Ratings, November 2025)
• By destination country: the United States alone accounts for 44.29% of AUM, the United Kingdom 25.02%, and Canada 16.37%, meaning three countries hold 85.68% of the entire book (CARE Ratings, November 2025)
• By course type: STEM courses make up 72.50% of the overseas education loan portfolio, with non-STEM courses, business, arts, humanities, accounting for the remaining 27.50% (CARE Ratings, November 2025)
• By security type: only 9.81% of loans are secured; the rest rely on a mandatory earning co-borrower rather than collateral (CARE Ratings, November 2025)
• By funding source (liability side): term loans from banks make up 81.89% of Auxilo’s own borrowings, non-convertible debentures 11.38%, securitisation 4.62%, and external commercial borrowings 2.12%, drawn from a network of 44 banks, NBFCs and financial institutions (CARE Ratings, November 2025)

The surprise in that split is how concentrated the borrower base already is around three Western economies whose visa and immigration policy has grown less predictable, not more, since 2020. A company that spent its early years fighting to prove overseas study was a viable asset class has now built a book where nearly half of everything it has lent rides on the continued attractiveness of a single country, the United States, as a study destination.

The risks

• Concentration risk, twice over: roughly 96% of the book is overseas education loans, and 85.68% of AUM sits in just three countries. A tightening of student visas, a slowdown in graduate hiring, or reduced appetite for foreign study in any one of the US, UK or Canada would hit disbursals and, with a lag, collections (CARE Ratings, November 2025)
• Unproven seasoning: the loan book only started growing meaningfully from FY22, meaning most loans have not yet lived through a full repayment cycle of roughly five to six years. CARE Ratings notes explicitly that “sustenance of asset quality is yet to be seen” given how recent the bulk of the growth is, and that gross non-performing assets rising past 3% would be a formal trigger for a rating downgrade (CARE Ratings, November 2025)
• Asset-liability mismatch: education loans carry a roughly 10-year contracted tenure while Auxilo’s own borrowings are shorter-dated; the company’s asset-liability statement as of 30 September 2025 shows a negative cumulative mismatch in the one-to-three-year bucket, meaning it depends on continuous refinancing and rollovers from its 44 lenders to bridge that gap rather than on maturities lining up naturally (CARE Ratings, November 2025)

The takeaway

The lesson in Auxilo’s numbers is not really about education finance. It is about what a company can get away with when it removes one form of risk by deliberately taking on another. Every mainstream lender treated overseas education loans as fundamentally uninsurable without property as security; Auxilo built its entire model on betting that a mandatory co-borrower and a genuinely difficult underwriting process, evaluating the university, the course and the country’s job market rather than the family’s assets, could do the same job that collateral does for a bank. For five years, on a book that has barely been tested by a full economic cycle, that bet has held. The company’s own credit rating history says the same thing in a duller register: agencies do not raise a rating from A- to A+ because a story sounds good, they raise it because the numbers behind an unconventional model kept clearing the bar, year after year, in a business where almost everyone else insisted the model could not work without collateral.

Frequently asked questions

What does Auxilo Finserve do?

Auxilo Finserve is an RBI-registered, education-focused non-banking finance company that lends to individual students for higher education in India and abroad, mostly without collateral, and separately lends working-capital and infrastructure finance to schools, colleges and vocational training institutes.

Who owns Auxilo Finserve?

Auxilo is privately held. Its two founding promoters, Akash Bhanshali (through ELME Advisors LLP) and Balrampur Chini Mills Limited, each hold 29.99% on a fully diluted basis as of September 2025. The remainder is held by ICICI Bank and private-equity investors including Tata Capital Growth Fund II, Trifecta Leaders Fund I, Xponentia Opportunities Fund II and Jade Inclusion Limited, an entity of LeapFrog Investments (CARE Ratings, November 2025).

Is Auxilo Finserve profitable?

Yes. Auxilo reported a net profit of ₹111.94 crore in FY25, up from ₹69.22 crore in FY24 and ₹25.7 crore in FY23, on revenue that grew from ₹174 crore to ₹528 crore over the same period (CARE Ratings, November 2025; Entrackr, September 2025).

How much has Auxilo Finserve raised, and what is it worth?

Its promoters have put in roughly ₹350 crore since 2017. External investors added ₹51.09 crore from ICICI Bank in FY20, ₹470 crore in a July 2023 round led by Tata Capital Growth Fund II, and close to ₹300 crore more in FY25 from Jade Inclusion Limited, Trifecta and Xponentia. No post-money valuation from these rounds has been publicly disclosed (CARE Ratings, November 2025; PR Newswire, July 2023).

Is Auxilo Finserve listed on a stock exchange?

No. Its equity is privately held and unlisted. Its non-convertible debentures and commercial paper are rated by CARE Ratings (A+/Stable and A1+ respectively, as of November 2025) and CRISIL (A+/Stable, upgraded from A/Positive on 30 March 2024), and trade in the debt market.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• CARE Ratings (CareEdge Ratings), press release on Auxilo Finserve Private Limited, November 2025
• CARE Ratings, press release on Auxilo Finserve Private Limited, January 2022
• CRISIL, rating rationale on Auxilo Finserve Private Limited, March 2024
• PR Newswire India, “Auxilo Finserve Raises ₹470 Cr…”, July 2023
• Business Standard, “Auxilo Finserve raises Rs 470 cr; to expand loan base, product offerings”, July 2023
• Business Standard / Moneyworks4me, “ICICI Bank invests Rs 51.09 crore in Auxilo Finserve”, March 2020
• Trilegal, “Auxilo Finserve’s INR-470 crore equity fundraise from investors”, 2023
• Entrackr, “Auxilo Finserve books Rs 174 Cr revenue and Rs 26 Cr profit in FY23”, July 2023
• Entrackr, “Auxilo’s profit jumps 2.5X in FY24; revenue grows double”, August 2024
• Entrackr (Fintrackr), “Auxilo reports Rs 528 Cr revenue and Rs 112 Cr PAT in FY25”, September 2025
• PR Newswire India / National Skill Development Corporation, MoU announcement with Auxilo Finserve, July 2022
• Outlook Money and Propelld, explainers on the IBA Model Education Loan Scheme collateral thresholds, 2025

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