Aye Finance IPO has received approval from the Securities and Exchange Board of India (SEBI) to launch its much-awaited public offer worth INR 1,450 crore. Aye Finance is an NBFC and known for its finance services for the underserved micro and small enterprise (MSE) segment. Aye Finance submitted its IPO papers on 20 December 2024 and received approval on 3 April 2025. This is a big milestone for the company as it gets ready to tap the public markets to fuel its growth and deepen its roots in India’s vibrant MSME credit ecosystem.
Aye Finance IPO Structure
Aye Finance IPO comprises a fresh issue of INR 885 crore and an offer-for-sale worth INR 565 crore by existing shareholders. While the fresh issue will be used to grow the lending book, branch expansion and digital transformation, the OFS will enable early investors like CapitalG (Google’s investment arm), Alpha Wave India, Elevation Capital, LGT Capital Invest and others to exit partially.
Notably, Aye Finance operates without a single identifiable promoter — a rare feature in India’s NBFC IPO landscape, signaling a professionally managed enterprise with strong institutional investor backing.
Aye Finance – Overview and Use of IPO Proceeds
As per the draft papers, the net proceeds from the fresh issue will be deployed to augment the company’s capital base to support its growing asset book. Aye Finance’s mission has always revolved around bridging the credit gap for micro enterprises, and this capital infusion will empower it to scale its operations efficiently.
The company operates across 18 Indian states and three union territories, with a footprint of 499 branches and 5,08,224 active customers as of 30 September 2024. Its AUM (Assets Under Management) has grown at a staggering CAGR of 60.69% from FY22 to FY24, touching INR 4,979.76 crore as of the latest half-year mark. This diversification — both geographic and sectoral — positions Aye Finance as one of the most robust players among Peer MSME-focused NBFCs, according to CRISIL.
Aye Finance IPO – Financials At a Glance
From a net loss of INR 51.35 crore in FY22, Aye Finance reported a net profit of INR 171.68 crore in FY24 — a remarkable turnaround powered by consistent growth in interest income and improved operational leverage. For H1 FY25 (ended 30 September 2024), the company recorded a PAT of INR 107.80 crore on a total income of INR 717.05 crore.
Its return on equity (RoE) soared to 17.22% in FY24 and stood at a strong 15.22% annualized for H1 FY25. This performance came alongside a comfortable debt-to-equity ratio of 2.56 and a Net Interest Margin (NIM) of 15.37%. The company’s Gross NPA ratio was contained at 3.32%, while Net NPAs stood at just 1.15%, highlighting prudent credit underwriting and robust collections mechanisms.
Unique Business Model
What distinguishes Aye Finance in a crowded lending landscape is its “phygital” approach — a blend of physical branch presence and digital intelligence. The company leverages AI and ML across sourcing, underwriting, disbursement, and collections to service small-ticket loans (ATS: INR 1.50 lakh) efficiently.
Its proprietary cluster-based underwriting model, developed from deep insights across 70+ business clusters, allows the firm to underwrite customers lacking traditional credit histories — a key barrier for most conventional lenders.
Over 91% of loans are linked to ACH (automated clearing house) mandates, while predictive models guide repayment tracking, ensuring high efficiency in collections.
OFS Breakdown
Heavyweight backers like CapitalG, Alpha Wave India, LGT Capital, Elevation Capital, A91 Partners, and MAJ Invest have anchored the company’s rise and are participating in the OFS. Here’s a quick glance at the estimated OFS amounts:
- LGT Capital Invest Mauritius PCC – INR 150 crore
- CapitalG LP + CapitalG International LLC – INR 136.80 crore
- Alpha Wave India I LP – INR 100 crore
- A91 Emerging Fund I LLP – INR 100
- MAJ Invest – INR 56.04 crore
- Individual shareholders (Jetleys) – INR 22.16 crore
Significance of Aye Finance IPO
India’s MSME credit market presents an enormous addressable opportunity. With over 6.3 crore micro enterprises and a credit gap exceeding INR 53 lakh crore, the sector remains severely underserved by formal institutions. Aye Finance is well-positioned to address this unmet need with its agile model and deep customer insight.
Interestingly, Aye Finance IPO arrives at a time when the market sentiment around NBFCs is buoyant. Recent IPOs have generated an average return of 17.66% in 2024, with Bajaj Housing Finance delivering a record 135% gain on its listing day.
Key Takeaways
- Market Leadership: Among top MSME-focused NBFCs with the widest geographic diversification.
- Strong Financials: Significant improvement in RoE, NIM, and PAT over past three fiscals.
- Digital-First Model: AI/ML-powered underwriting and collections at scale.
- Massive TAM: Poised to capture India’s growing INR 59–60 lakh crore MSME credit market.
- IPO Objective: Fuel lending growth, expand branches, enhance technology.
Conclusion
Aye Finance IPO approval is not just a normal event—its a capital-raising event. The company’s a strategic maneuver to cement its leadership in India’s underpenetrated micro-enterprise lending space. Backed by robust financials, deep tech integration, and a nuanced understanding of borrower behavior, Aye Finance is charting a bold path in India’s digital lending frontier. As it enters the public arena, all eyes will be on how the company leverages market funds to scale with precision, discipline, and impact.
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