Alphabet’s CapitalG-backed Aye Finance, a lender focused on India’s micro, small, and medium enterprises, is seeking to raise $171 million from its initial public offering, it disclosed in a filing Tuesday.
The offering comprises a $104 million fresh share issue and a $67 million secondary sale by existing investors, with proceeds aimed at expanding the startup’s loan portfolio and strengthening its capital base.
The lender, valued at about $400 million, operates 499 branches across 22 Indian states, with $588 million in assets under management as of September 2024.
Aye Finance caters to India’s most underserved small businesses, providing critical financial access to micro-enterprises typically excluded from traditional banking systems. The startup, founded in 2014, extends business loans — including mortgage, hypothecation, and term credit — to unorganized sector businesses with an average loan size of $1,800, leveraging proprietary technology and analytics to assess creditworthiness.
Aye Finance’s revenues reached $122.5 million in fiscal 2024, but non-performing assets increased from 2.74% to 3.29%.
The startup, which also counts Elevation Capital and British International Investment among its backers, has raised more than $160 million to date.
Its IPO prospectus caps a record year for Indian startup IPOs. Financial services startup MobiKwik is going public soon. Swiggy’s IPO, last month, was the largest among tech startups globally this year.
The IPO also comes at a critical moment for India’s financial services sector. The MSME segment contributes approximately 30% of India’s GDP but faces a substantial credit gap estimated at over $650 billion.
Axis Capital, IIFL Capital, JM Financial, and Nuvama Wealth Management are running the books of Aye Finance. Pricing details remain undisclosed.
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