Aye Finance IPO subscribed 16% on Day 2, retail portion booked 47% despite muted GMP: Should you apply?

Aye Finance IPO

• Aye Finance IPO subscribed 16 percent on second day of bidding
• Retail investors subscribed 47 percent of their reserved portion
• Shares to list on BSE and NSE on February 16

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The mainboard IPO of Aye Finance has been subscribed 16 percent on its second day of public bidding on February 10. This comes despite grey market estimates hinting towards a muted listing for the NBFC.

Aye Finance IPO received bids for around 72.86 lakh shares, as against the offer size of 4.55 crore shares, according to data on NSE. Retail investors have subscribed 47 percent of their reserved portion so far.

The portions kept for Non Institutional Investors (NII) and Qualified Institutional Buyers (QIB) have been booked 2 percent and 13 percent respectively.

About Aye Finance IPO:

Aye Finance launched its IPO to raise Rs 1,010 crore through a fresh issue of shares worth Rs 710 crore and an offer-for-sale (OFS) of shares worth Rs 300 crore by Alpha Wave India, MAJ Invest, CapitalG, LGT Capital, and Vikram Jetley.

The IPO of the Gurugram-based non-banking finance company (NBFC) will remain open for public bidding between February 9 and February 11 at a price band of Rs 122-129 per share. Investors can bid for a minimum of 116 shares, requiring an investment of Rs 14,152 at the upper price band, and in multiples thereafter.

The allotments will likely be finalized by February 12, and the shares of the company are scheduled to be listed on stock exchanges BSE and NSE on February 16.

Aye Finance IPO GMP:

Ahead of listing, the unlisted shares of Aye Finance were trading flat at the IPO price with zero grey market premium (GMP), according to data on Investorgain. The GMP quoted by the site has fallen from the 3.88 percent quoted on February 4.

According to IPO Watch too, the unlisted shares of the company were trading with zero GMP over the IPO price.

Aye Finance IPO Anchor Book:

The NBFC on February 6 mobilised Rs 454.5 crore from 19 anchor investors. The company on Friday said it has finalised allocation of 3.52 crore equity shares to anchor investors at the upper price band. Nippon Life India, and Goldman Sachs Funds were the biggest investors in the anchor book, each buying shares worth Rs 74 crore.

Global names like Bay Pond, Ithan Creek Master Investors, Intergrated Core Strategies, Societe Generale, Ashoka India Equity Investment Trust, and BNP Paribas Financial Markets also participated in the anchor book.

The NBFC that provides loans to micro scale micro, small and medium enterprises (MSMEs) with small-ticket business loans with an average ticket size on disbursement of Rs 0.18 million to micro enterprises will utilise fresh issue proceeds for augmenting it capital base to meet future capital requirements arising out of growth of business and assets.

Should you apply for Aye Finance IPO?

Aye Finance operates as a middle-layer NBFC focusing on small-ticket lending to micro and small MSMEs. Among its key strengths, Aye Finance benefits from a strong focus on the MSME segment, broad geographic diversification, and a technology-driven operating model that has helped improve cost efficiency, with the cost-to-income ratio moderating to the 50–52 percent range, said Khushi Mistry, Research Analyst at Bonanza.

The analyst explained that the company has also demonstrated faster AUM and branch expansion compared to several peers.

Master Capital Services said that outlook for NBFC-led MSME financing remains positive, supported by structural demand and deeper financial inclusion. “In this evolving landscape, Aye Finance Limited, as an NBFC-ML focused on MSME lending, is strategically positioned to capitalize on the sustained growth opportunity in the segment,” it said.

With its focus on small-ticket, secured, and semi-secured business loans, the company caters to underserved micro enterprises that remain largely outside the formal credit ecosystem, the domestic brokerage said. “Investors may consider the IPO as a potential long-term investment opportunity,” it added.

“Aye Finance’s IPO is happening at a time when investors at a macro level are showing interest in MSME lending. With its approach towards the underbanked micro-entrepreneurs and a tech-based credit assessment model, the company has created a unique niche. While most market sentiment is temporary and will determine the performance of the listing, the longer perspective will be determined by the company’s discipline towards asset quality, the length to which its lending model is scalable, and the manner in which the company manages credit cycles,” said Siddharth Maurya, Founder & Managing Director at Vibhavangal Anukulakara.

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