IPO-bound non-banking finance SME Aye Finance has reported a 41% rise in revenue, taking it past Rs 1,500 crore in FY25, with a modest net profit growth of 6 percent at Rs 171 crore compared to Rs 161 crore a year ago.
“Credit cost has been higher in the last fiscal due to the oversupply of loans by various market players. We have prudently made write-offs to clean up the portfolio stress. We are already witnessing a reduction in business stress,” the company said in a statement to Moneycontrol.
Aye Finance said that the company’s credit cost had come down in Q4FY25 and the same falling trend has continued in Q1FY26.
“We continue to see healthy demand in our segment, and we expect normal business conditions as we progress through this year,” Aye Finance added in the statement. Aye Finance’s assets under management rose 24% on year to Rs 5,525 crore by the end of March 2025.
Gurugram-based Aye Finance has filed for an initial public offering (IPO) to raise up to Rs 1,450 crore from the public markets. The company specialises in providing working capital finance and is largely focused on small and medium enterprises with an annual turnover of Rs 10 lakh to Rs 1 crore in semi-urban areas.
IPO Process in Full Swing
The proposed IPO will include a fresh issue of equity shares worth up to Rs 885 crore, along with an offer for sale (OFS) of equity shares totalling Rs 565 crore. The offering is part of Aye Finance’s strategy to strengthen its financials and expand operations in a competitive lending market.
Earlier this year, Aye Finance raised Rs 110 crore in debt from Northern Arc, ASK Financial, MAS Financial, and CredAvenue for its NBFC operations.
A91 Partners and Google’s CapitalG-backed company are 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 additional debt for the NBFC. This follows a similar debt deal in August 2024, in which Aye Finance closed a Rs 212-crore business loan securitisation transaction.
Ahead of the IPO, Aye Finance is keen on enhancing its footprint in the competitive lending market, following years of strong growth.
Last September, the microlending platform successfully secured Rs 250 crore in a Series G funding round led by Singapore-based ABC Impact. The round also saw participation from British International Investment. This equity raise, combined with earlier debt financing of $30 million in June, brought Aye Finance’s total equity fundraising to Rs 1,500 crore.
Recently, the company saw the resignation of five non-executive and non-independent directors, mostly representing investors, who stepped down for personal reasons. Tightening the board is common practice for a private company looking to go public.
These directors were Vivek Kumar Mathur from Elevation Capital, Navroz Darius Udwadia from Alpha Wave India, Kartik Srivatsa from LGT Capital Invest Mauritius PCC; Kaushik Anand Kalyana Krishnan, representing A91 Emerging Fund and Gaurav Malhotra, representing British International Investment, resigned.
Aye Finance offers loans either through hypothecation of working assets (83% of AUM as on March 2025) or through mortgage properties (mortgage loan and quasi-mortgage loan constituting 15% and 2% of AUM, respectively).
According to a report by India Ratings, Aye Finance’s major shareholders are Elevation Capital (19.86% holding on diluted basis, at end-September 2023), LGT Capital (17.38%), Capital G (16.43%), Falcon Edge (now Alpha Wave at 13.32%), A91 (10.32%) and MAJ Invest (7.11%). Promoter Sanjay Sharma held a 3.16% stake in the company, while the rest was held by employee welfare trust (1.81%) and others.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
