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Alphabet’s CapitalG-backed Aye Finance, a lender focused on India’s micro, small, and medium enterprises, has filed for its initial public offering (IPO), seeking to raise $171 million. The filing was made public yesterday.
According to the disclosure, the company plans to issue fresh shares worth $104 million and sell existing shares worth $67 million by current investors. The funds raised from this IPO will be used to expand Aye Finance’s loan portfolio and strengthen its capital base.
The Indian lender is valued at approximately $400 million and has a robust presence across 22 states in India, with over 499 branches. As of September 2024, the company had $588 million worth of assets under management.
Aye Finance is dedicated to providing critical financial services to India’s most underserved small businesses, which are typically excluded from traditional banking systems. The startup extends business loans, including mortgage, hypothecation, and term credit, to these unorganized sector businesses with an average loan size of $1,800. It relies on proprietary technology and analytics to assess the creditworthiness of its borrowers.
The company’s revenue reached a staggering $122.5 million in fiscal 2024, although non-performing assets increased from 2.74% to 3.29%. Aye Finance has received over $160 million in funding so far, with notable investors like Elevation Capital and British International Investment on its cap table.
The Aye Finance IPO comes at a critical juncture for India’s financial services sector, which is facing an enormous credit gap of over $650 billion in the MSME (micro, small, and medium enterprises) segment.
Source: techcrunch.com
