Alphabet-backed NBFC Aye Finance to launch Rs 2k cr IPO in a year: Report

Focused on small and medium enterprises, Aye Finance has roped in four arrangers for its upcoming IPO

Aye Finance, a non-bank financial company, is targeting to launch its initial public offering (IPO) within the next nine to 12 months, according to a report by MoneyControl.

The Alphabet-backed company, which focuses on small and medium enterprises (SMEs), has enlisted four arrangers for its forthcoming IPO. Aye Finance aims to raise between Rs 1,700 and 2,000 crore in capital through the offering.

Axis Capital, JM Financial, Nuvama, and IIFL Securities have been appointed as merchant bankers to manage the IPO, the report added.

Aye Finance raised Rs 310 cr in Dec

In December last year, Aye Finance secured Rs 310 crore as part of its Series F funding round, with British International Investment (BII), the United Kingdom’s development finance institution, leading the investment. Existing investors, including Waterfield Fund of Funds and A91 Partners, also participated in the round.

This fundraising round reportedly increased the company’s valuation by 30 per cent, compared to its valuation of $250 million when Capital G (Google’s venture capital fund) invested Rs 210 crore. As of September 2023, the company had raised approximately Rs 85,200 crore in equity capital.

Aye Finance’s projected profit

Aye Finance is projected to close FY24 with a loan book of Rs 4,473 crore and a net profit of Rs 161 crore, an increase from Rs 57 crore in FY23. A significant portion of the company's loan book is concentrated in the unsecured loans segment, and it specialises in providing working capital finance, primarily to SMEs.

According to a report by India Ratings, the major shareholders of Aye Finance as of the end of September 2023 include – Elevation Capital (19.86 per cent on a diluted basis), LGT Capital (17.38 per cent), Capital G (16.43 per cent), Falcon Edge (now Alpha Wave at 13.32 per cent), A91 Partners (10.32 per cent), and MAJ Invest (7.11 per cent). Promoter Sanjay Sharma held a 3.16 per cent stake in the company, while the remaining shares were held by an employee welfare trust (1.81 per cent) and others.