Aye Finance IPO: Check IPO Date, Lot Size, Price & Details

Introduction

Aye Finance Limited was incorporated on 12 August 1993 as Doda Finance Private Limited in Punjab. The company rebranded itself as Aye Finance Private Limited in 2014, reflecting a sharper focus on micro-enterprise lending, and was subsequently converted into a public limited company on 10 December 2024. Aye Finance is a professionally managed institution and does not have an identifiable promoter, as no single individual or entity exercises controlling ownership or management influence.

The company is primarily engaged in providing small-ticket business loans to micro-scale MSMEs across India. Its lending focus is on enterprises with annual turnovers ranging between ₹2.0 million and ₹10.0 million, typically operating in manufacturing, trading, services, and allied agricultural activities. These borrowers largely remain underserved by traditional banking channels, creating a structural opportunity for specialised lenders like Aye Finance.

As of 30 September 2025, Aye Finance served 586,825 active unique customers and reported assets under management (AUM) of ₹60,276.22 million. The company follows a scalable ‘phygital’ operating model, combining physical reach with digital capabilities. Its pan-India network comprises 568 branches, supported by proprietary technology, data-driven underwriting, and digital collection systems.

Aye Finance is the most geographically diversified lender among its MSME-focused NBFC peers, with operations spanning 18 states and three union territories. Its AUM is well balanced across regions, with exposure to the North (34.80%), East (27.79%), West (22.73%), and South (14.69%).

The company’s overall average ticket size for small-ticket business loan disbursements stands at ₹0.18 million, while mortgage-backed loans carry the highest average ticket size at ₹0.41 million, reflecting product diversification within its lending portfolio.

IPO Details:

Object of the Issue

The company proposes to utilise the net proceeds from the issue primarily to strengthen its capital base, enabling it to support future growth, expand its lending operations, and meet long-term capital requirements.

Key Strengths

• Strong Positioning in an Underserved Segment
  Aye Finance has established itself as a leading small-ticket lender in the MSME financing space, with a sharp focus on micro-scale enterprises. As of 30 September 2025, the company served 586,825 active unique customers, the largest customer base among MSME-focused NBFC peers. With micro-enterprises accounting for nearly 98% of India’s MSMEs, the company operates in a large and structurally underpenetrated addressable market.
• High Geographic Diversification
  The company is among the most geographically diversified lenders in the MSME segment. It operates through 568 branches across 18 states and three union territories as of 30 September 2025. Its AUM is well spread, with no single state contributing more than 15.77% of total AUM, thereby mitigating region-specific concentration risks.
• Technology-Driven ‘Phygital’ Operating Model
  Aye Finance follows a ‘phygital’ model that integrates on-ground branch teams with advanced digital infrastructure. The company has achieved 100% paperless loan sanctioning and 100% cashless disbursements. It leverages AI and machine learning-based models for real-time bureau screening, bounce probability assessment, and repeat borrower credit evaluation. Nearly 24% of loan cases were processed through straight-through processing as of 30 September 2025, enhancing efficiency and scalability.

Risks

Aye Finance Limited is exposed to several internal and external risks that may significantly affect its business operations and financial condition. The primary risk factors as detailed in the sources include:

• Credit and Asset Quality Risks
  The company is subject to the risk of non-payment or default by its borrowers, particularly as it serves micro-scale businesses that often have limited financial records and credit histories. The Gross NPA ratio has shown an increasing trend, rising from 2.49% as of 31 March 2023 to 4.85% as of 30 September 2025. A significant portion of the company's Assets Under Management (AUM)—37.97% as of 30 September 2025—consists of unsecured loans, which pose a higher credit risk due to the lack of realisable collateral. Underwriting decisions rely heavily on information provided by customers and third-party providers; erroneous or misleading data could affect credit assessments and collateral valuations.
• Operational and Strategic Risks
  The inability to successfully manage or sustain growth, particularly when opening new branches in semi-urban or rural markets, may lead to higher operating costs. As a 'phygital' lender, the company is vulnerable to information technology failures, security breaches, or cyberattacks that could lead to data loss and reputational damage. There is a heavy reliance on senior management and a committed employee base; the company faces high employee attrition rates (65.53% as of 30 September 2025), which could impact productivity.
• Regulatory and Legal Risks
  As an NBFC-ML, the company is subject to periodic inspections by the RBI; non-compliance with their observations could lead to penalties or operational restrictions. Changes in laws relating to priority sector lending, foreign debt, or tax regimes (such as GST or GAAR) could adversely affect business prospects.

Financial Snapshot:

(All amounts in ₹ million)

Peer Comparison:

Conclusion:

Aye Finance has a clear growth strategy focused on improving productivity from its existing network of 568 branches rather than adding new locations aggressively. Data from the RHP shows that branches older than three years have an average AUM of ₹135.47 million, while newer branches have only ₹61.83 million, indicating strong upside as these branches mature. The company is also expanding its mortgage loan portfolio, which has grown sharply from 1.86% of AUM in FY23 to 19.28% as of September 30, 2025, providing some improvement in portfolio stability.

Despite these positives, the business model carries structural risks. Lending to micro-MSMEs with a low average ticket size of ₹0.18 million requires high transaction volumes and continuous physical engagement, leading to elevated costs. The operating expense to average total assets ratio stood at 9.45% in H1 FY26, nearly double that of key peers. Similarly, the cost-to-income ratio at 52.62% remains significantly higher than comparable NBFCs. In addition, borrowers typically have limited credit history, increasing sensitivity to economic stress. Additionally, the company’s NPAs have increased over the years, indicating weaker asset quality, which could further strain financial performance if this trend continues in the future.

Overall, the IPO suits only high-risk investors. Investors seeking stable returns or lower risk exposure should avoid this IPO.

IPO Allotment

Find out the allotment status for the Aye Finance IPO by checking its registrar's page.