Aye Finance gets Sebi nod for Rs 1,450 crore IPO; details here

Aye Finance Ltd, a Gurugram-based non-banking financial company (NBFC), has received approval from the Securities and Exchange Board of India (Sebi) for its upcoming initial public offering (IPO) aimed at raising Rs 1,450 crore.

The IPO comprises a fresh issue worth Rs 885 crore and an offer for sale (OFS) of Rs 565 crore by several shareholders. Key stakeholders involved in the OFS include LGT Capital Invest Mauritius PCC, CapitalG LP, and A91 Emerging Fund I LLP.

The company's proceeds from the fresh issue will be directed towards strengthening its capital base, supporting future growth, and fulfilling general corporate purposes. Aye Finance may also consider a further issue of securities worth Rs 177 crore, potentially reducing the fresh issue size.

The NBFC targets micro-scale micro, small, and medium enterprises (MSMEs). As of September 2024, Aye Finance has 508,224 active unique customers and manages assets under management (AUM) totalling ₹4,979.76 crore.

According to a CRISIL report, it stands as the fastest-growing NBFC among peer MSME-focused shadow lenders in India, recording a 64 per cent year-on-year (YoY) AUM growth between fiscal 2024 and fiscal 2023.

The company's financial services encompass secured and unsecured loans, including mortgage and hypothecation loans, to varied sectors like manufacturing, trading, and agriculture.

Aye Finance's IPO is led by Axis Capital Ltd, IIFL Capital Services Ltd, JM Financial Ltd and Nuvama Wealth Management Ltd, with KFin Technologies Ltd acting as the registrar for the issue.

The company provides small-ticket business loans averaging Rs 1,50,000 to MSMEs, and is noted for its geographical diversification compared to its peers.

The OFS includes significant sales by known investors such as LGT Capital and CapitalG LP, among others, indicating strong backing and interest from institutional investors.

The company's strategic financial offerings aim to address the underserved micro-scale enterprise sector in India, ensuring access to necessary capital for business expansion and operations.

Aye Finance's rapid growth trajectory and robust service portfolio could make its IPO a noteworthy event in the Indian financial landscape. The additional potential issuance of securities, if pursued, will be coordinated with the book-running lead managers, which could adjust the fresh issue size.