IPO-Bound Aye Finance's Q1 Profit Halves To INR 31 Cr

SUMMARY

The NBFC's top line grew 21% to INR 407 Cr during the quarter under review from INR 335.4 Cr in Q1 FY25

Aye Finance’s impairment loss surged 78% to INR 86.7 Cr during the quarter under review from INR 48.6 Cr in Q1 FY25

For the full fiscal year FY25, the company’s net profit grew 6% YoY to INR INR 171.3 Cr while operating revenue jumped 40% YoY to INR 1,459.7 Cr

IPO-bound NBFC Aye Finance’s net profit declined about 50% to INR 30.6 Cr in Q1 FY26 from INR 60.9 Cr in the year-ago quarter as its impairment loss rose sharply. On a sequential basis, Aye Finance’s profit fell 25% from INR 40.7 Cr.

The NBFC’s top line grew 21% to INR 407 Cr during the quarter under review from INR 335.4 Cr in Q1 FY25. Operating revenue reduced slightly from INR 409.1 Cr in the previous quarter.

Interest income was the biggest contributor to operating revenue in Q1, growing 16% YoY to INR 360.8 Cr. Fees and commission, net gain on derecognition of financial instruments and net gain on fair value charges were the other contributors to the top line. The income from these sources stood at INR 46.2 Cr in Q1 FY26, up 95% from INR 23.7 Cr in the year-ago quarter.

Including other income of INR 9.2 Cr, Aye Finance’s total revenue stood at INR 416.1 Cr in the June quarter.

Notably, the company’s net profit rose 6% to INR 171.3 Cr in FY25 from INR 161.1 Cr in FY24. Operating revenue for the full fiscal year stood at INR 1,459.7 Cr, up over 40% from INR 1,040.2 Cr in the previous year.

In April this year, Aye Finance received SEBI’s go ahead to proceed with its public issue. The company had filed its DRHP in December last year for its IPO.

As per the DRHP, the public issue would comprise a fresh issue of equity shares worth up to INR 885 Cr and an offer for sale (OFS) of up to INR 565 Cr. Investors like LGT Capital, CapitalG, A91 Fund, MAJ Invest, Alpha Wave, among others, will offload their shares via the OFS.

The company plans to deploy the fresh issue proceeds from the IPO to meet its future capital requirements, arising out of the business and assets growth.

Over the past few months, Aye Finance has been on a spree to raise funds via private placements of debentures and bonds. It allotted debentures worth INR 215 Cr during March-June and raised $15 Mn via issuance of bonds to BlueOrchard Microfinance Fund in May 2025.

Besides, it raised a debt funding of INR 110 Cr from Northern Arc, ASK Financial Holdings, MAS Financial Services and CredAvenue in January this year.

Now, let’s take a look at the company’s expenditure for the first quarter of the ongoing fiscal year.

Breaking Down Aye Finance’s Expenses

The company’s total expenditure for the quarter grew 39% to INR 375.2 Cr in Q1 FY26 from INR 269.2 Cr spent in the year-ago quarter.

Finance Cost: This was the biggest expense for the NBFC, rising 17% YoY to INR 126.3 Cr.

Employee Expenses: The company’s spending on its workforce grew 40% YoY to INR 115.3 Cr.

Impairment Of Financial Instruments: Aye Finance’s impairment loss surged 78% to INR 86.7 Cr during the quarter under review from INR 48.6 Cr in Q1 FY25.