Aye Finance, backed by Google parent Alphabet’s investment arm – Capital G, has filed its Draft Red Herring Prospectus (DRHP) with Indian regulator ‘SEBI’ to raise $171 million (~ ₹1,450 Crore) through an Initial Public Offering (IPO). The MSME lender will offer a $104 million fresh share issue and a $67 million secondary sale via existing investors.
The Gurugram-based Aye Finance, founded in 2014, offers financial services to micro, small, and medium enterprises (MSMEs). With around $400 million valuation, the company operates 499 branches within 22 states across the country. The startup also provides mortgage, hypothecation, and term credit since it is tough for small businesses from unorganized sectors to tap traditional banking services. In an estimated market of 63 million micro-scale enterprises, Aye Finance targets a credit gap of roughly $650 billion.
Aye Finance IPO Plan
This IPO plan knocks at a time when the company’s revenue hit $122.5 million in the fiscal year ended 2024. However, despite the revenue, the company’s non-performing assets shot up from 2.74% to 3.29%. Elevation Capital and British International Investment are among the fintech startup’s backers. It has raised more than $160 million to date.
The proceeds from this IPO will aid in diversifying and scaling up its loan portfolio and bolster the company’s capital base to sponsor upcoming expansions and other corporate needs.
Some notable investors like LGT Capital, CapitalG LP, A91 Emerging Fund I LLP, and Alpha Wave Ventures will likely participate in the offer for sale (OFS). Meanwhile, Axis Capital, IIFL Capital, JM Financial, and Nuvama Wealth Management will manage Aye Finance’s IPO.
Aye Finance is the latest name that made it to the exciting list of upcoming IPOs, which includes LG India, PayU, Flipkart, and more. With the growing IPO scenario in India, approximately $18Bn has been raised so far this year. Just a few days back, the fintech startup MobiKwik IPO oversubscribed by 119.38 times, and earlier this month, Swiggy’s IPO was the largest among tech startups globally in 2024.
