NBFC Startup Aye Finance’s INR 1,450 Cr IPO Gets Board Approval, IPO Preparation Begins

Aye Finance is a non-banking finance firm (NBFC). Aye Finance has initiated the public listing process. During an extraordinary general meeting (EGM) on Wednesday (December 11), the company’s board reportedly approved collecting up to INR 1,450 crore through an initial public offering (IPO).

Aye Finance, founded in 2014 by Sanjay Sharma and Vikram Jetley, provides loans to small businesses nationwide. It uses AI-powered credit evaluation algorithms to evaluate risk in the absence of traditional business documentation.

According to records obtained by Moneycontrol, the NBFC’s IPO will include a new issue of shares worth up to INR 885 crore and an offer for sale (OFS) component of INR 565 crore. The company has hired Axis Capital, JM Financial, Nuvama, and IIFL Securities as merchant bankers to handle the public offering.

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The NBFC’s bid for an IPO is part of a larger strategy to boost its financial position and lending activities.

Aye Finance is also bolstering its board and top management ahead of the IPO. According to reports, the company’s board has accepted the hiring of Sanjay Sharma as managing director and Aditya Misra, director of ABC Impact, as a non-executive non-independent director.

In a dramatic reshuffle, up to five non-executive and non-independent directors, largely investor representatives, resigned from Aye Finance’s board for “personal reasons” at the EGM.

Vivek Kumar Mathur of Elevation Capital, Navroz Darius Udwadia of Alpha Wave India, Kartik Srivatsa of LGT Capital Invest Mauritius PCC, Kaushik Anand Kalyana Krishnan of A91 Emerging Fund, and Gaurav Malhotra of British International Investments were among those who left.

This comes a few months after speculations revealed that the NBFC was planning an IPO for INR 2,000 crore to INR 3,000 crore. At the time, it was claimed that the company was “almost ready” to submit its draft red herring prospectus (DRHP) to market regulator SEBI.

The news comes at a time when Aye Finance is actively financing. In September, Singapore-based impact investor ABC Impact invested INR 250 crore in the NBFC as part of its Series G investment. Aye Finance had signed an INR 250 crore loan securitization agreement with Goldman Sachs a month earlier.

The Alphabet-backed startup secured INR 250 crore in debt from Dutch entrepreneurial development bank FMO in June, after raising INR 137 crore from German impact investing firm Invest in Visions in March of this year.

Aye Finance’s net profit tripled to INR 161 crore in fiscal year 2023-24 (FY24), up from INR 54 crore the previous year. Revenue increased 67% to INR 1,072 crore from INR 643.34 crore in FY23.

Aye Finance’s assets under management (AUM) increased to INR 4,500 crore at the end of FY24 from INR 2,700 crore in FY23.