Aye Finance's Profit Zooms 37% To INR 108 Cr in H1 FY25

SUMMARY

Revenue from operations in the first half of the fiscal stood at INR 692.24 Cr, up 47% from INR 472.01 Cr in H1 FY24

The IPO-bound company’s assets under management (AUM) stood at INR 4,979.76 Cr at the end of September 2024

Aye Finance’s INR 1,450 Cr IPO will comprise a fresh issue of shares worth up to INR 885 Cr and an offer-for-sale (OFS) component of up to INR 565 Cr

Non-banking financial company (NBFC) Aye Finance’s net profit jumped 37% to INR 107.80 Cr in the first six months of the fiscal year 2024-25 (H1 FY25) from INR 78.79 Cr in the same period of previous fiscal, its draft red herring prospectus (DRHP) showed.

Revenue from operations in the first half of the fiscal stood at INR 692.24 Cr, up 47% from INR 472.01 Cr in H1 FY24. The IPO-bound company earned the largest amount, INR 640.24 Cr, from interest income.

Including other income of INR 24.81 Cr, the company’s total income for the period stood at INR 717.05 Cr.

Aye Finance’s INR 1,450 Cr IPO will comprise a fresh issue of shares worth up to INR 885 Cr and an offer-for-sale (OFS) component of up to INR 565 Cr.

The NBFC turned profitable in FY23, posting a profit of INR 43.85 Cr as against a loss of INR 51.35 Cr in FY22. In FY24, its profit soared 291% year-on-year to INR 171.68 Cr. Revenue from operations stood at INR 1,040.22 Cr in FY24, up 67% from INR 623.43 Cr in FY23.

At the end of September 2024, the NBFC’s assets under management (AUM) stood at INR 4,979.76 Cr, up 48% from INR 3,368.37 Cr a year ago. Aye Finance disbursed loans worth INR 2,014.17 Cr in H1 FY25, up 24% from INR 1,619.01 Cr in H1 FY24.

The company’s non performing assets (NPA) stood at INR 154.74 Cr, up 81% from INR 85.61 Cr in H1 FY24. The gross NPA ratio also went up to 3.32% from 2.69% at the end of H1 FY24.

Founded in 2014 by Sanjay Sharma and Vikram Jetley, Aye Finance provides loans to micro scale MSMEs across India. It offers a range of secured as well as unsecured business loans to entities in manufacturing, trading, service and allied agriculture sectors.

The company is undertaking the IPO exercise to meet its future capital requirements to meet its short-term growth plans.

Delving Into Aye Finance’s Expenditure

The NBFC’s total expenses stood at INR 572.94 Cr in H1 FY25, up 55% from INR 369.16 Cr in the same period of the prior fiscal.

Finance Cost: The expense under the head during the period under review stood at INR 229.26 Cr, up 55% from INR 148.10 Cr a year ago.

Impairment On Financial Instruments: The company’s impairment on financial instruments stood at INR 101.39 Cr in H1 FY25, more than 2X of INR 41.35 Cr in the year-ago period. This included INR 76.43 Cr loans that Aye Finance wrote off as well as INR 94 Lakh loss on settlement of bad loans.

Employee Expense: Aye Finance spent INR 173.91 Cr on its workforce in the first half of FY25, up 33% from INR 131.21 Cr it spent last year. While a large chunk of INR 144.95 Cr was spent to pay the salaries and wages, the company’s ESOP expense during the period stood at INR 3.75 Cr.

As of September 30, 2024, Aye Finance employed 8,388 employees.

The NBFC has raised a total funding of over $480 Mn till date. It last raised INR 250 Cr (about $30 Mn) in its Series G funding round led by Singapore-based impact investor ABC Impact in September this year.