Upcoming IPO: Aye Finance, a Gurugram-headquartered non-banking financial company (NBFC), has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹1,450 crore through an initial public offering (IPO). The company, which focuses on providing financial services to micro, small, and medium enterprises (MSMEs), is poised to capitalise on India’s growing credit demand in this segment.
The proposed IPO will include a fresh issue of equity shares worth ₹885 crore and an offer for sale (OFS) amounting to ₹565 crore by existing shareholders. Among those participating in the OFS are prominent investors such as LGT Capital, CapitalG LP, A91 Emerging Fund I LLP, and Alpha Wave Ventures.
Aye Finance has demonstrated strong financial performance, reporting a 291.5% surge in profit after tax (PAT) to ₹171.7 crore in FY2024 from ₹43.9 crore in FY2023. The company also boasts a low net non-performing asset (NPA) ratio of 0.9% and a provision coverage ratio (PCR) of 72%, which are among the best in its sector.
With a return on equity (ROE) of 17.2% and a prudent debt-to-equity ratio of 2.8, the NBFC has positioned itself as a reliable player in India’s MSME lending space. Its assets under management (AUM) stood at ₹4,980 crore as of September 30, 2024, reflecting a 64% year-on-year growth.
Aye Finance IPO Objective
The fresh issue proceeds will be used to bolster the company’s capital base to support future business expansion, asset growth, and other corporate needs. Aye Finance has also indicated the possibility of a pre-IPO placement worth up to ₹177 crore, which would adjust the fresh issue size accordingly.
Aye Finance targets India’s underserved micro-scale enterprises, operating in a market of 63 million MSMEs with an estimated ₹53 trillion credit gap. The company serves over 5 lakh active customers through a network of 478 branches spread across 18 states and 3 Union Territories. Its diversified portfolio ensures no single state contributes more than 15% to its total AUM.
The lender’s unique product suite includes secured loans against property and working assets, as well as unsecured business loans, tailored specifically for small-ticket borrowers. On average, the company disburses loans of ₹1.5 lakh per customer.
