The Aye Finance IPO is set to open for subscription on Monday, February 9, marking another important public issue from India’s growing NBFC space focused on micro enterprises.
The offer will remain open until Wednesday, February 11, with anchor investor allocation scheduled for Friday, February 6.
As the issue date approaches, market attention is building around the Aye Finance IPO, especially given its scale, sector exposure, and operating footprint across India’s MSME ecosystem.
Aye Finance IPO: Issue Overview
The Aye Finance IPO, with a total issue size of ₹1,010 crore, comprises a fresh issue of shares along with an offer for sale by existing shareholders.
Key IPO details at a glance:
- Issue opens: February 9
- Issue closes: February 11
- Anchor allocation: February 6
- Price band: ₹122 to ₹129 per share
- Face value: ₹2 per share
- Total issue size: ₹1,010 crore
The IPO includes:
- Fresh issue: ₹710 crore
- Offer for sale (OFS): ₹300 crore
At the top end of the price band, the company is valued at around ₹3,184 crore.
Market Performance Context
The Aye Finance IPO arrives at a time when market participation in primary issues remains selective, with investors closely tracking business fundamentals, balance sheet strength, and clarity of capital deployment.
Within this environment, NBFC issues linked to MSME credit expansion continue to draw attention due to their role in bridging India’s formal credit gap—especially for micro enterprises operating outside the traditional banking system.
Company Background: What Aye Finance Does?
Aye Finance operates as an NBFC–Middle Layer (NBFC-ML), focusing on lending to micro, small, and medium enterprises (MSMEs) across India.
The company provides:
- Business loans for working capital
- Loans for business expansion
- Credit secured through hypothecation of working assets or property
Its lending portfolio supports enterprises across:
- Manufacturing
- Trading
- Services
- Allied agriculture
As per CRISIL data, Aye Finance serves 586,825 active unique customers across 18 states and 3 union territories, reflecting a wide operational reach.
As of September 30, 2025:
- Assets under management (AUM): ₹60,276.22 million
Target Customer Segment
The Aye Finance IPO represents exposure to India’s micro-enterprise segment—often underserved by traditional lenders.
The company focuses on:
- Micro enterprise owners in urban and semi-urban areas
- Businesses engaged in cash-and-carry operations
- Enterprises operating for over five years
A notable characteristic of this segment is the limited availability of formal documentation. Many customers lack:
- Income proof
- Business registration
- GST registration
- Income-tax returns
- Bank statements
This operating reality shapes Aye Finance’s underwriting and field-based credit assessment model.
Promoter & Ownership Structure
Aye Finance is led by its co-founders:
- Sanjay Sharma – Managing Director & CEO
- Vikram Jetley – Co-founder
Sanjay Sharma oversees strategic and operational leadership, drawing from extensive banking experience.
Due to its investment structure, Aye Finance does not have a single identifiable promoter, as defined under conventional listing norms.
Key shareholders include institutional investors such as:
- Elevation Capital
- LGT Capital
- CapitalG (Alphabet)
- Alpha Wave India
Utilisation of Fresh Issue Proceeds
According to disclosures in the red herring prospectus, proceeds from the fresh equity issue will be utilised to meet future funding requirements arising from:
- Business growth
- Asset expansion
No alternate deployment objectives have been specified beyond operational funding needs.
Issue Allocation Structure
The Aye Finance IPO follows a standard allocation framework:
- Qualified Institutional Buyers (QIBs): Not less than 75%
- Non-Institutional Investors (NIIs): Not more than 15%
- Retail investors: Not more than 10%
IPO Timeline: Key Dates
The tentative schedule for the Aye Finance IPO is as follows:
- Basis of allotment: February 12
- Refund initiation: February 13
- Credit of shares: February 13
- Listing on BSE & NSE: February 16
Industry Landscape: MSME Credit Gap
The operating landscape for the Aye Finance IPO is shaped by a large and persistent MSME funding gap in India.
As of Fiscal 2025:
- Estimated MSME credit shortfall: ₹103 trillion
- Micro enterprises account for 98% of MSMEs
- Total potential credit demand: ₹76 trillion
- Formal credit availability: ₹42 trillion
- Estimated credit gap: ₹34 trillion
NBFC participation in MSME lending has increased sharply:
- Fiscal 2019: 9.2%
- Fiscal 2025: 16.6%
This share has continued to rise as NBFCs deepen their presence in micro-enterprise financing.
Financial Performance Snapshot
For the year ended March 2025, Aye Finance reported:
- Net profit: ₹175.3 crore
- Previous year profit: ₹171.7 crore
Other key financial indicators include:
- Net interest income: ₹858 crore
- Year-on-year growth: 37.9% (from ₹622.2 crore)
As of September 2025:
- Active customers: 5.86 lakh
- AUM: ₹6,027.6 crore
These figures highlight the company’s expanding loan book and customer base within the MSME segment.
Key Business Risks Highlighted in RHP
The red herring prospectus outlines multiple risks relevant to the Aye Finance IPO.
Asset quality risk
- Gross NPA ratio:
- March 31, 2023: 2.49%
- March 31, 2025: 4.21%
- September 30, 2025: 4.85%
Rising NPAs may impact financial performance if recoveries weaken.
Unsecured loan exposure
- Share of unsecured loans in AUM:
- FY 2023: 30.26%
- FY 2024: 37.91%
- FY 2025: 39.68%
- Sept 2024: 41.47%
- Sept 2025: 37.97%
Delayed or unsuccessful recoveries could affect cash flows and balance-sheet health.
Anchor Investor Lock-In Details
Equity shares allotted to anchor investors carry mandatory lock-in periods:
- 50% of shares: Lock-in of 90 days
- Remaining 50%: Lock-in of 30 days
Lock-in starts from the date of allotment.
Summary
The Aye Finance IPO brings a large NBFC-ML focused on India’s micro-enterprise lending space to the primary market. The issue combines a sizable fresh equity raise with partial exits by existing shareholders, supported by a nationwide operational footprint and growing assets under management.
With business activity anchored in MSME credit delivery and financial disclosures aligned to sector realities, the IPO lays out a clear picture of scale, customer base, financial trends, and risks—exactly as detailed in the company’s prospectus.
As the subscription window opens on February 9, the Aye Finance IPO stands as another closely tracked offering within India’s expanding NBFC and MSME financing landscape.
Source: Livemint
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