Aye Finance secures Rs 110-cr debt, nears deal with Goldman Sachs ahead of IPO

Representative image

IPO-bound SME lender Aye Finance has raised Rs 110 crore in debt from Northern Arc, ASK Financial, MAS Financial, and CredAvenue, to fuel its NBFC operations.

The A91 Partners and Google’s CapitalG-backed company is also in the final stages of closing another deal with Goldman Sachs (India) Finance, the non-bank finance arm of Goldman Sachs in India, for raising an additional debt. This follows a similar debt deal with the global investment firm in August 2024, in which Aye closed a Rs 212-crore business loan securitisation transaction.

The company did not respond to Moneycontrol queries seeking comment on the development.

The latest debt was raised through a private placement of 11,000 Non-Convertible Debentures (NCDs), each of Rs 1 lakh, according to company filings seen by Moneycontrol. Investors in the deal included Northern Arc Capital, ASK Financial Holdings, MAS Financial Services, and CredAvenue.

The Gurugram-based MSME lender looks to hit the primary market soon to raise Rs 1,450 crore from the initial share sale, Moneycontrol reported exclusively. The public issue will consist of fresh shares of Rs 885 crore, and an offer-for-sale of Rs 565-crore shares by existing shareholders, according to draft IPO papers filed on December 16.

Alphabet, Elevation Capital, LGT-backed Aye Finance plans to float Rs 1,450-crore IPO, files draft papers with Sebi

A91 Partners, CapitalG and Alpha Wave will sell their stakes through the public issue. Other selling shareholders include LGT Capital, MAJ Invest Financial, Harleen Kaur Jetley and Vikram Jetley.

Elevation Capital V (formerly, SAIF Partners India V) is the largest shareholder in Aye Finance, with a 16.19 percent stake, followed by LGT Capital Invest Mauritius with 14.13 percent and Alpha Wave India with 11.21 percent.

Axis Capital, IIFL Capital Services, JM Financial, and Nuvama Wealth Management are appointed as the book-running lead managers for the issue.

The firm, which competes with listed peers like SBFC Finance and Five-Star Business Finance, recorded a 291.5 percent growth in profit for fiscal 2024 at Rs 171.7 crore, up significantly from Rs 43.8 crore in the previous fiscal. Net interest income grew by 68.8 percent to Rs 622.2 crore, compared to Rs 368.5 crore a year back.

Disbursement an expense, collection is revenue: Fintech founders decode realities of SME lending

Founded in 2014, Aye Finance primarily lends to micro-businesses like kiranas/general stores, dairies, manufacturers, and traders with an annual turnover of Rs 10 lakh to Rs 1 crore. With an average ticket size of Rs 1-1.5 lakh, hypothecation loans and quasi-mortgage loans comprised 92 percent of the AUM as of June 30, 2024.