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Alphabet-backed Indian lender Aye Finance files for IPO
Alphabet’s CapitalG-backed Aye Finance, a lender focused on India’s micro, small, and medium enterprises, has announced its plans to go public by filing for an initial public offering (IPO). The company aims to raise $171 million through the IPO.
As per the disclosure, the IPO will consist of a fresh share issue worth $104 million and a secondary sale by existing investors worth $67 million. The funds raised from this offer will be used to expand Aye Finance’s loan portfolio and strengthen its capital base.
The lender has achieved significant growth since its inception in 2014. Today, it operates 499 branches across 22 Indian states, with an asset under management of $588 million as of September 2024. The company values itself at around $400 million.
Aye Finance focuses on providing financial access to India’s most underserved small businesses, which are typically excluded from traditional banking systems. It offers a range of loans, including mortgage, hypothecation, and term credit, to unorganized sector businesses with an average loan size of $1,800. The company utilizes proprietary technology and analytics to assess the creditworthiness of these enterprises.
During fiscal 2024, Aye Finance reported revenues of $122.5 million, although its non-performing assets (NPAs) increased from 2.74% to 3.29%. The startup has received over $160 million in funding to date and is backed by Alphabet’s CapitalG, as well as Elevation Capital and British International Investment.
The planned IPO comes at a critical time for India’s financial services sector. MSMEs (micro, small, and medium enterprises) contribute approximately 30% of India’s GDP but faces a significant credit gap estimated to be over $650 billion.
Aye Finance has partnered with Axis Capital, IIFL Capital, JM Financial, and Nuvama Wealth Management for the IPO, which will provide pricing details at a later date.
Source: techcrunch.com
