Upcoming IPO: Aye Finance IPO opens on February 9. GMP, 10 key things to know from RHP before investing

The subscription period for the Aye Finance IPO is set to begin on Monday, February 9, and will conclude on Wednesday, February 11. The allocation for anchor investors in the Aye Finance IPO is expected to occur on Friday, February 6. Aye Finance IPO price band has been established between ₹122 and ₹129 per equity share with a face value of ₹2. Aye Finance IPO GMP today is ₹5. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Aye Finance share price was indicated at ₹134 apiece, which is 3.88% higher than the IPO price of ₹129. Aye Finance IPO details This ₹1,010 crore offering consists of a new equity issue of ₹710 crore and a sale of shares valued at ₹300 crore from existing shareholders, which include Alpha Wave India, MAJ Invest Financial Inclusion Fund, CapitalG (a part of Alphabet), LGT Capital, and Vikram Jetley. At the top end of the price range, the valuation of the company is approximately ₹3,184 crore. Among the prominent investors, Elevation Capital possesses a 16.03% stake, trailed closely by LGT Capital at 13.99%, Alphabet through CapitalG with 13.14%, and Alpha Wave India holding 11.1%. The company stated that the capital generated from the new issuance will be directed towards meeting future funding requirements due to business and asset growth. The lead managers for the issue include Axis Capital, IIFL Capital Services, JM Financial, and Nuvama Wealth Management, while Kfin Technologies Ltd. acts as the registrar for the offering. Aye Finance IPO has reserved not less than 75% of the shares in the public issue for qualified institutional buyers (QIB), not more than 15% for non-institutional Institutional Investors (NII), and not more than 10% of the offer is reserved for retail investors. Tentatively, Aye Finance IPO basis of allotment of shares will be finalised on Thursday, February 12 and the company will initiate refunds on Friday, February 13, while the shares will be credited to the demat account of allottees on the same day following refund. Aye Finance share price is likely to be listed on BSE and NSE on Monday, February 16. Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue. Aye Finance IPO Promoters Aye Finance is primarily led by co-founders Sanjay Sharma (MD & CEO) and Vikram Jetley, with Sanjay Sharma focusing on strategic and operational aspects, drawing on his vast experience in banking. Major stakeholders, including Elevation Capital and LGT Capital, hold significant shares in the company; however, due to its investment framework, Aye Finance does not have a single identifiable promoter in the conventional manner. Aye Finance IPO Peers As per the company's red herring prospectus (RHP), the company's listed peers include SBFC Finance Ltd (with a P/E of 27.32), and Five-Star Business Finance Ltd (with a P/E of 12.07). Aye Finance IPO business Aye Finance is an NBFC-ML (non-banking financial company – middle layer) that specializes in offering loans to micro-scale micro, small, and medium enterprises (MSMEs) throughout India. The company provides a variety of business loans for both working capital and expansion needs, secured by the hypothecation of working assets or property as collateral, catering to customers in sectors such as manufacturing, trading, services, and allied agriculture. They rank among the top non-banking financial institutions (NBFCs) supplying business loans to the largely neglected micro-scale enterprises in India, with a customer base of 586,825 active unique clients spanning 18 states and 3 union territories, alongside assets under management (AUM) of ₹60,276.22 million, as reported by CRISIL on September 30, 2025. Aye Finance IPO - Target Customer Segment The bank offers a variety of loan products specifically tailored for the MSME sector, with a primary focus on micro enterprises. Their diverse range of products, which includes both secured and unsecured term loans as well as working capital options, is designed to meet the unique business needs of these micro enterprises, addressing everything from daily working capital requirements to long-term capital investments. They target micro enterprise owners in urban and semi-urban areas, especially those engaged in cash-and-carry operations within the manufacturing, trading, service, and allied agriculture sectors. While these customers typically have businesses that have been running for over five years, many do not possess documentation such as income proof, business registration, GST registration, income tax returns, and bank statements, as noted in the CRISIL Report. Aye Finance IPO - Salient aspects of the business Diversified Growth Right Product Market Fit Unique Underwriting Capabilities and Field Collections Technology-Driven Operational Efficiency Financial Performance Aye Finance IPO - Product Offerings Aye Finance IPO Industry The sector in which the company functions involves MSMEs in India that encounter a significant credit shortfall, estimated to be ₹103.00 trillion as of fiscal 2025. 98% of these MSMEs are classified as micro enterprises, and as of Fiscal 2025, the total potential credit demand is projected to be around ₹76 trillion, while the existing formal financing is approximately ₹42 trillion, leaving an estimated credit gap for MSMEs of about ₹34 trillion. The proportion of NBFCs has grown from 9.2% in Fiscal 2019 to 16.6% in Fiscal 2025, and this share is anticipated to continue increasing as NBFCs enhance their focus on this sector, according to a CRISIL Report. Aye Finance IPO Financials For the fiscal year concluding in March 2025, Aye Finance recorded a profit of ₹175.3 crore, representing a modest increase from ₹171.7 crore in the prior year. Net interest income surged by 37.9% to ₹858 crore, compared to ₹622.2 crore. By September 2025, the company serviced 5.86 lakh active unique customers and managed assets totaling ₹6,027.6 crore, reflecting its expanding influence in the lending industry. Aye Finance IPO key risks Some of the key risks are as follows; They face the risk of borrowers not making payments or defaulting, which could negatively impact their operations, financial performance, and overall financial health. The company’s gross non-performing asset (NPA) ratio rose from 2.49% on March 31, 2023, to 4.21% on March 31, 2025, and reached 4.85% by September 30, 2025. During the six months ending September 30 in both 2025 and 2024, as well as in the fiscal years 2025, 2024, and 2023, unsecured loans represented 37.97%, 41.47%, 39.68%, 37.91%, and 30.26% of their total assets under management, respectively. Their business, financial results, cash flow, and financial condition could be adversely impacted if they are unable to recover these receivables promptly or at all. Lock-in of equity shares allotted to anchor investors Fifty percent of the equity shares assigned to anchor investors in the anchor investor portion will have a lock-in period of 90 days beginning from the date of allotment, whereas the remaining 50% of the equity shares granted to these anchor investors will be subject to a lock-in period of 30 days from the date of allotment. Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. 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