Highlights
| Issue Size – 78,294,572 shares | Issue Open/Close – 09 Feb / 11 Feb, 2026 |
| Price Band (Rs.) 122 – 129 | Issue Size (Rs.) ~ 10,100 mn |
| Face Value (Rs) 2 | Lot Size (shares) 116 |
Aye Finance Limited (AYE) incorporate in 1993, an NBFC, offers secured and unsecured small business loans for working capital, including mortgage loans, ‘Saral’ Property Loans, secured and unsecured hypothecation loans, primarily to micro-scale MSMEs.
The company offers business loans for business expansion, secured by working assets or property, to customers in manufacturing, trading, service, and allied agriculture sectors. The company is serving 586,825 active customers across 18 states and three union territories with significant assets under management as of H1FY26.
Company is among the leading non-banking financial companies (NBFCs) providing business loans to the largely underserved micro scale enterprises in India, with 586,825 active unique customers across 18 states and 3 union territories and with assets under management (AUM) of Rs. 60.28 bn, as of H1FY26.
Out of the total proceeds of the issue, Rs. ~7,100 mn may be utilized towards onward lending, among other things, and improve company’s CRAR, after offer related expenses, and enable them to leverage more, while Rs. ~3,000 mn would go to the existing selling shareholders after deducting their proportion of offer related expenses and relevant taxes thereon, as applicable.
Key Highlights
- Overall credit to GDP ratio in India stood at 93 pct in CY 2024, which was significantly lower as compared to 139 pct for Germany, 143 pct for United States and 198 pct for China, signalling significant room for credit penetration in the nation.
- As a leading NBC focused on micro-scale MSMEs, the company has demonstrated strong growth, with Assets Under Management (AUM) growing at a CAGR of 42.60 pct from 727 mn in FY23 to 755 mn in FY25, and reaching 760 mn as of H1FY26.
- The company’s underwriting expertise provides a strong competitive edge in target segments with customers lacking formal documentation or credit history, relying on estimating cash flows and profit margins within specific business clusters—drawing on insights from over 70 clusters as of H1FY26, supported by robust collection systems, including on-ground teams, tele-collections, and digital models for optimized recovery.
- As of H1FY26, AYE has a broad network of 568 branches spread across 18 states and 3 union territories, with Bihar, Uttar Pradesh, Rajasthan, Madhya Pradesh and Maharashtra being its key states. These states cumulatively account for approximately 49 pct of their branch network.
- The company’s core strategies include (i) Increasing AUM per branch by increased penetration in their target segment (ii) Growing its Mortgage Loan Portfolio (iii) Leveraging Technology and Data Sciences for Improving Productivity and Scalability. (iv) Improving Operating Leverage (v) Optimizing Borrowing Costs and Diversifying Lender Base.
- Net Interest Income of the company has grown by 53 pct CAGR in over FY23-25 and Profit grew by 110 pct CAGR over same period. During FY25 the NII of the company jumped by 38 pct YoY to Rs. 8.580 mn. During FY25, the company reported profit of Rs. 1,752 mn.
Key Risk
- The company has a significant exposure to higher-risk unsecured loans, which constituted ~38 pct of its total AUM, or Rs. 7,229 mn, as of H1FY26, posing a greater risk of recovery in case of default compared to its secured portfolio.
- Asset quality is a growing concern as the company’s Gross NPA ratio has steadily increased from 2.49 pct in FY23, to 4.21 pct in FY25, and further to 4.85 pct as of H1FY26, indicating a rising risk of non-payment from its borrowers.
- Operations are subject to regulatory scrutiny from the RBl, which conducted an inspection in FY23 and sought clarifications on internal audit coverage and underwriting. Furthermore, statutory auditors have issued remarks on the company’s audit trail software in both FY24 and FY25.
Financial Performance
| (In Rs. million, unless otherwise stated) | FY23 | FY24 | FY25 | H1FY25 | H1FY26 |
| Net Interest Income | 3,685 | 6,222 | 8,580 | 4,110 | 4,750 |
| NIM | 13.5% | 15.5% | 15.3% | 13.0% | 14.1% |
| PPOP | 1,513 | 3,654 | 5,175 | 2,518 | 2,863 |
| PAT | 398.7 | 1716.8 | 1752.5 | 1078.0 | 645.7 |
| GNPA | 2.5% | 3.2% | 4.2% | 3.3% | 4.9% |
| NNPA | 1.3% | 0.9% | 1.4% | 1.2% | 1.8% |
Peer Comparision
| Peer Comparison | Aye Finance Ltd. | SBFC Finance Ltd. | Five Star Business finance |
| Net Interest Income | 8,580 | 4,804 | 11,705 |
| NIM % | 15.3% | 9.9% | 16.1% |
| PPOP | 5,175 | 5,322 | 9,572 |
| PAT | 1,753 | 3,452 | 10,725 |
| GNPA % | 4.2% | 2.7% | 1.8% |
| NNPA % | 1.4% | 1.5% | 0.9% |
Valuation
Aye Finance Limited is a non-banking financial company (NBFC) that provides both secured and unsecured working capital loans to small businesses. At the upper end of the price of Rs. 129, the issue quotes PE of 24.6x on FY26 annualized earnings, PB of 1.92x on FY25 basis. The issue looks fully priced.
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