Aye Finance Secures INR 110 Cr Debt Ahead Of IPO

IPO-bound lendingtech startup Aye Finance has secured INR 110 Cr (around $12.8 Mn) in debt from a clutch of investors, including Northern Arc, ASK Financial Holdings, MAS Financial Services and CredAvenue.

In an exchange filing on December 31, the non-banking financial company (NBFC) said that its board approved the issuance of 1,000 non-convertible debentures (NCDs) with a face value of INR 1 Lakh each in two tranches to raise the sum.

In a separate filing with the BSE on December 20, the company had said it would utilise the funds to expand its NBFC operations. 

The latest debt raise comes just days after the lending tech startup filed its draft red herring prospectus (DRHP) with market regulator SEBI for INR 1,450 Cr initial public offering (IPO).

Aye Finance’s initial share sale will be a combination of a fresh issue of equity shares worth INR 885 Cr and an offer-for-sale (OFS) amounting to INR 565 Cr by existing shareholders.

The company is looking to deploy the IPO’s proceeds to meet its future capital requirements, arising out of the business and assets growth. 

On the financial front, Aye Finance in the first half (H1) of the financial year 2024-2025 (FY25) reported a 37% jump in its net profit at INR 107.8 Cr. Operating revenue for the period also climbed to INR 692.24 Cr from INR 472 Cr in the year-ago period. 

In FY24, the company’s net profit widened 291.7% year-on-year (YoY) to INR 171.6 Cr 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. 

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.

In the last funding round, Aye Finance secured INR 250 Cr in Series G funding led by Singapore-based impact investor ABC Impact.

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