Aye Finance IPO: What investors should know about strengths and risks from RHP

Aye Finance IPO: The ₹1,010 crore initial public offering of Aye Finance will be open for subscription from February 9 to February 11. The issue, with a price band of ₹122 to ₹129 per share, is a mix of new shares valued at ₹710 crore and an offer for sale of 2.22 crore shares aggregating to ₹300 crore.

The middle-layer non-banking financial company (NBFC) will use IPO proceeds to strengthen its capital base, supporting future capital needs arising from the expansion of its business and asset base.

Aye Finance IPO: A lot of its strengths from RHP

• Aye Finance is a leading lender of small-ticket loans to micro-scale MSMEs with a full product line (secured and unsecured) and a focus on serving a large and unaddressed total addressable market (TAM). The company also provides loans secured against property as collateral. It disburses loans through its branch offices and supply chain finance platform, SwitchPe.
• The company's assets under management (AUM) grew from ₹2,721.55 crore as of March 2023 to ₹6,027.62 crore as of September 2025. Its disbursements soared from ₹2,357.09 crore in FY23 to ₹4,291.33 crore in FY25. Similarly, Aya Finance's active base of unique customers has advanced from 305,524 in March 2023 to 586,825 as of September 2025.
• According to the RHP, the company said its underwriting expertise gives it a key competitive advantage that has been honed over the years. Lending to MSMEs has challenges like limited financial records and restricted access to traditional banks and financial institutions, making it difficult to underwrite loans for such customers. The company's basis of evaluating creditworthiness is based on a reliable estimation of business cash flows and margins based on a specific understanding of the ‘business cluster’ using observable data points.
• Aye Finance has robust multi-tiered collection capabilities. The collection process has been designed to address the repayment behaviours of the target customer segment. The collection strategies include tele-calling units, field collection teams and legal and recovery teams.
• The company follows a ‘phygital’ business model that combines the strengths of digital and physical channels to optimise operations.

Aye Finance IPO: Risk factors

• The company is subject to default or non-payment by borrowers, which can affect its business and financial condition. Its gross NPA ratio has surged from 2.49% in March 2023 to 4.21% in March 2025.
• Its operations depend on the accuracy and completeness of data provided by customers and certain third-party service providers, and reliance on any erroneous or misleading information can affect judgement of a customer's creditworthiness, as well as the value of and title to the collateral.
• If the company is unable to control the level of gross non-performing assets/Net NPAs/Stage 3 Assets in its portfolio effectively, it can affect financial condition.
• In the six months ended September 2025 and September 2024 and fiscals 2025, 2024 and 2023, its unsecured loans comprised 37.97%, 41.47%, 39.68%, 37.91% and 30.26% of its total AUM, respectively. If the firm is unable to recover such receivables, it can affect business, cash flows and financial condition.
• It has experienced negative cash flows from operating activities in the past.

Aye Finance IPO GMP