Aye Finance, a non-banking financial company (NBFC), has got the green light from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO) to raise ₹1,450 crore. This is a major milestone in the journey of Aye Finance as it seeks to access the public markets to fuel growth and further strengthen its roots in India’s lively MSME credit ecosystem.
The IPO consists of a fresh issue of ₹885 crore and an offer for sale (OFS) of ₹565 crore by various shareholders, such as LGT Capital Invest Mauritius PCC, CapitalG LP, and A91 Emerging Fund I LLP. The proceeds from the fresh issue will be used to reinforce Aye Finance’s capitalization base, finance future growth, and meet general corporate aims. The company can also consider an additional issue of securities aggregating ₹177 crore, which could further decrease the fresh issue size.
Aye Finance is focused on offering financial products to micro, small, and medium enterprises (MSMEs), with a specific focus on the underserved micro-scale enterprise segment. As of September 2024, the company has more than 508,224 active customers spread over 18 states and three union territories, handling assets under management (AUM) of ₹4,979.76 crore. It was the fastest-growing NBFC peer among MSME-focused lenders in India, it reported a remarkable 64% year-on-year AUM expansion between fiscal years 2023 and 2024, according to a report by CRISIL.
The financial services of the company are secured and unsecured loans like mortgage and hypothecation loans to industries like manufacturing, trading, and agriculture. Aye Finance is characterized by its geographical spread and small-ticket business loans averaging ₹1,50,000, which are tailored to address MSMEs’ working capital needs.
The Issue is managed by Axis Capital Ltd, IIFL Capital Services Ltd, JM Financial Ltd, and Nuvama Wealth Management Ltd, and the registrar is KFin Technologies Ltd. The equity shares are to be listed on the National Stock Exchange Limited and the Bombay Stock Exchange Ltd. This listing will increase Aye Finance’s exposure and reputation in the financial market, allowing it to grow its operations effectively and fill the credit gap for micro-enterprises in India.
Aye Finance’s strategy of concentration in MSMEs fits in well with the wider financial inclusion objective of India. The strong growth pattern of the company and diversification in services render the company’s IPO an event to be reckoned with in Indian financial markets. Strong institutional support coupled with the history of consistent fast-paced expansion sets the stage for Aye Finance to capitalize on this public listing to increase the size of operations and position itself as a prominent player in MSME lending.
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