Aye Finance Gets SEBI Nod for ₹1,450 Crore IPO to Boost MSME Lending

Gurugram-based non-banking financial company (NBFC), Aye Finance, has received approval from SEBI for its ₹1,450 crore initial public offering (IPO). The company, which supports micro and small businesses across India, filed its draft papers in December 2024 and is now all set to hit the primary market.

What Does the IPO Include?

The IPO will comprise a fresh issue of shares worth up to ₹885 crore and an offer for sale (OFS) worth up to ₹565 crore by both institutional and individual shareholders. The face value of each share is ₹2.

Among the selling shareholders are key investors like LGT Capital, CapitalG LP, A91 Emerging Fund, Alpha Wave India, MAJ Invest, CapitalG International LLC, and promoters Harleen Kaur Jetley and Vikram Jetley. This move will provide existing investors with partial exits while bringing in new capital for business growth.

Know more about IPO allotment status and check your application details online for the latest updates on share allocation.

Use of IPO Funds

Aye Finance plans to use the proceeds from the fresh issue to boost its capital base. This will help the company meet future funding needs for business expansion and other general corporate purposes. The company may also consider a pre-IPO placement of ₹177 crore, which would reduce the fresh issue size accordingly.

Strong Financial Performance

Aye Finance has shown impressive financial growth. Its net profit increased by 291.5% from ₹43.9 crore in FY23 to ₹171.7 crore in FY24. The NBFC also offers a healthy Return on Equity (ROE) of 17.2% and maintains a sound debt-to-equity ratio of 2.8.

The company has the lowest Net Non-Performing Assets (NPAs) among its peers at just 0.9%, along with a high provision coverage ratio of 72%, indicating strong asset quality.

Supporting Small Businesses with a Nationwide Reach

Aye Finance focuses on empowering India’s micro-enterprises by offering small-ticket business loans, with an average disbursement size of ₹1.5 lakh. According to CRISIL, it stands out as the most geographically diversified NBFC among its peers in the MSME lending space.

The IPO is being managed by Axis Capital, IIFL Capital Services, JM Financial, and Nuvama Wealth Management, with KFin Technologies acting as the registrar. With a solid financial base and a clear focus on underserved small businesses, Aye Finance’s IPO might draw significant investor interest.

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