Alphabet-Backed Aye Finance Files Draft Papers For Rs 1,450 Crore-IPO

Alphabet-backed non-financial banking company Aye Finance Ltd. has filed draft papers for its initial public offering on Dec. 16. The IPO has a fresh issue component of up to Rs 885 crore and an offer for sale segment worth Rs 565 crore.

Under the offer-for-sale segment, shareholders Harleen Kaur Jetley and Vikram Jetley will be selling equity shares worth Rs 14.5 crore and Rs 7.7 crore each through the offer. Alphabet's independent growth fund CapitalG LP will offload shares worth Rs 130 crore, while A91 Emerging Fund I LLP will sell stake worth Rs 100 crore through the offer.

The fresh issue proceeds will be used for augmenting the company's capital base to meet future capital requirements, as per the draft red herring prospectus.

Aye Finance is a non-banking financial company–middle layer focused on providing loans to micro-scale MSMEs across India. They offer business loans for working capital and business expansion needs, against hypothecation of working assets or against security of property to customers across manufacturing, trading, service and allied agriculture sectors. As of Oct. 31, 2024, the company's debt pile stood at Rs 3,146.55 crore.

The NBFC's listed peers include SBFC Finance Ltd. and Five-Star Business Finance Ltd. SBFC Finance has a market capitalisation of Rs 9,904 crore, and revenue from operations worth Rs 1,018.6 crore for fiscal 2024, whereas Five-Star Business Finance has an market value of Rs 18,974 crore and revenue from operations worth Rs 2,182.85 crore for the same period.

For the quarter ended September, AyeFin clocked net profit of Rs 107.80 crore against revenue of Rs 692.24 crore. The company's bottom-line print stood at Rs 171.68 crore for the fiscal ended March 2024, against a topline of Rs 1,040.22 crore.

Axis Capital Ltd., IIFL Capital Services Ltd., JM Financial Ltd., and Nuvama Wealth Management Ltd. are the bankers handling the issue, while KFin Technologies Ltd. is the main registrar.