Aye Finance Files DRHP For INR 1,450 Cr IPO

Non-banking financial company (NBFC) Aye Finance has filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for INR 1,450 Cr initial public offering (IPO).

The IPO will include a fresh issue of equity shares worth INR 885 Cr and an offer-for-sale (OFS) amounting to INR 565 Cr by existing shareholders.

Among those participating in the OFS are institutional investors such as LGT Capital, CapitalG, A91 Fund, MAJ Invest and Alpha Wave and individual investors Harleen Kaur Jetley and Vikram Jetley.

While LGT Capital and Capital G plan to sell shares worth INR 150 Cr and INR 136.8 Cr, respectively, A91 Fund and Alpha Wave will each sell shares worth INR 100 Cr.  

MAJ Invest, Harleen Kaur Jetley and Vikram Jetley will sell shares worth up to INR 56 Cr, INR 14.5 Cr and INR 7.64 Cr, respectively. 

The proceeds from the fresh issue will be allocated to meet the company’s future capital requirements, arising out of the growth of our business and assets. Besides, the company intends to use the proceeds for undertaking existing business activities.

Axis Capital, IIFL Capital Services, JM Financial, and Nuvama Wealth Management are the book-running lead managers, and KFin Technologies Limited is the registrar of the issue.

Aye Finance’s net profit widened 291.7% year-on-year (YoY) to INR 171.6 Cr in the financial year 2023-24 (FY24) from INR 43.8 Cr in FY23. For the same period, the operating revenue jumped 66.86% to INR 1040.21 Cr from INR 623.42 in the year-ago period. 

The company in its DRHP filing also disclosed its financial performance for the six months ending September 30, 2024. It reported a net profit of INR 107.8 Cr for the period under consideration against INR 113.89 Cr reported in the year-ago period. Operating revenue for the period also climbed to INR 692.24 Cr from INR 472 Cr in the year-ago period. 

The DRHP filing comes after the company’s board on December 11 gave its nod for raising up to INR 1,450 Cr through an initial public offering (IPO). 

Founded in 2014 by Sanjay Sharma and Vikram Jetley, Aye Finance offers loans to small businesses across the country. It leverages its AI-powered credit assessment algorithms to assess risk in the absence of traditional business documents.

The development comes at a time when Aye Finance has been on a fundraising spree. In September, Singapore-based impact investor ABC Impact invested INR 250 Cr in the NBFC as part of its Series G round. A month prior to that, Aye Finance closed an INR 250 Cr loan securitisation deal with Goldman Sachs.

In June, the Alphabet-backed company bagged INR 250 Cr in debt from Dutch entrepreneurial development bank FMO, while it raised INR 137 Cr from German impact investment firm Invest In Visions in March this year.

To date, the company has secured a total funding of $485.53 Mn.