Aye Finance, the Indian micro, small, and medium enterprise lender backed by CapitalG, seeks to raise $171 million in its initial public offering, as disclosed in a filing on Tuesday.
The announcement features a $104 million equity offering and a $67 million secondary sale from existing investors, with funds directed towards expanding the startup’s mortgage portfolio and bolstering its financial foundation.
The lender, valued at approximately $400 million, maintains a significant presence across 22 Indian states, operating 499 branches that manage assets worth around $588 million as of September 2024.
Aye Finance provides crucial financial access to India’s underserved micro-enterprises, which are typically overlooked by traditional banking systems. Founded in 2014, the fintech startup specializes in providing customized financial solutions to small businesses in the unorganized sector by offering enterprise loans, mortgages, hypothecation, and term credits, with an average loan size of $1,800. Utilizing proprietary technology and advanced analytics, it assesses creditworthiness and offers tailored financing options.
Despite a strong fiscal 2024, Aye Finance’s non-performing assets increased from 2.74% to 3.29%, casting a shadow over the company’s overall performance with revenues of $122.5 million.
The startup, backed by investors including Elevation Capital and British Worldwide Funding, has secured over $160 million in funding to date.
India’s startup IPOs cap a record year with robust performance. MobiKwik, a prominent monetary companies startup. Swiggy’s highly anticipated initial public offering (IPO), which took place in its final month.
The IPO arrives at a pivotal moment for India’s financial services sector. While the Micro Small and Medium-sized Enterprises (MSME) sector accounts for approximately 30% of India’s Gross Domestic Product (GDP), it is plagued by an enormous credit gap, estimated to exceed $650 billion.
Axis Capital, IIFL Capital, J M Financial, and Nuvama Wealth Management are operating the books of Aye Finance. Pricing particulars stay undisclosed.
