Aye Finance Limited, a prominent non-banking financial company (NBFC) specializing in micro and small enterprise lending, is set to launch its much-anticipated Initial Public Offering (IPO) in February 2026. With a robust business model targeting India’s underserved MSME sector and backed by marquee investors including Elevation Capital, CapitalG (Google’s growth fund), and British International Investment, this IPO presents an interesting opportunity for investors looking to participate in the financial inclusion story of India.
Aye Finance IPO Issue Details at a Glance
| Parameter | Details |
| Issue Type | Mainboard IPO |
| Total Issue Size | ₹1,010 Crores |
| Fresh Issue | ₹710 Crores (5,50,38,760 shares) |
| Offer for Sale (OFS) | ₹300 Crores (2,32,55,814 shares) |
| Price Band | ₹122 to ₹129 per share |
| Face Value | ₹2 per share |
| Lot Size | 116 shares |
| Total Shares Offered | 7,82,94,572 shares |
| Issue Opening Date | Monday, February 9, 2026 |
| Issue Closing Date | Wednesday, February 11, 2026 |
| Allotment Date | Thursday, February 12, 2026 |
| Refund Initiation | Thursday, February 12, 2026 |
| Credit to Demat | Friday, February 13, 2026 |
| Expected Listing Date | Sunday, February 16, 2026 |
| Listing Exchanges | BSE and NSE |
Minimum Investment Requirements for Aye Finance IPO
| Investor Category | Min. Lots | Min. Amount (at ₹129) |
| Retail Individual Investors (RII) | 1 lot (116 shares) | ₹14,964 |
| Small HNI (sHNI) | 14 lots (1,624 shares) | ₹2,09,496 |
| Big HNI (bHNI) | 67 lots (7,772 shares) | ₹10,02,588 |
IPO Reservation Details
| Investor Category | Reservation |
| Qualified Institutional Buyers (QIB) | Not less than 75% |
| Non-Institutional Investors (NII) | Not more than 15% |
| Retail Individual Investors (RII) | Not more than 10% |
Book Running Lead Managers and Registrar
Book Running Lead Managers:
- Axis Capital Limited
- IIFL Capital Services Limited
- JM Financial Limited
- Nuvama Wealth Management Limited
Registrar to the Issue: KFin Technologies Limited
Grey Market Premium (GMP) of Aye Finance IPO 2026
As of the latest available information, the Grey Market Premium (GMP) for Aye Finance IPO started to trend and market showing GMP price for Aye Finance IPO. Currently its showing approx 4% up which is estimated 138 listing price. GMP Price is on 5th Feb 2026 Exact GMP will confirm once its start application proces and how much its subscribed. Grey Market Premium represents the price at which IPO shares are traded in the unofficial grey market before listing and can provide an indication of market sentiment toward the issue.
Important Note: Grey market premiums are unofficial and should not be the sole basis for investment decisions. They are speculative in nature and can fluctuate significantly. Investors should conduct thorough research and consider the company’s fundamentals before investing.
About Aye Finance Limited
Business Model
Aye Finance Limited is a specialized NBFC focused on providing credit solutions to India’s underserved micro and small enterprises (MSEs). Founded in 1993 (originally incorporated) and operationally active since 2013, the company has positioned itself as a bridge between traditional banking and the informal MSME sector that typically lacks access to formal credit.
The company operates on a unique ‘phygital’ model, combining physical presence with digital technology. As of September 2025, Aye Finance operates through 568 branches across 21 states and 3 union territories, serving over 586,825 active customers. The company employs approximately 10,459 full-time employees dedicated to assessing and serving micro-enterprises.
Product Portfolio
Aye Finance offers a diversified range of loan products tailored to meet the working capital and expansion needs of micro-businesses:
- Secured and unsecured hypothecation loans
- Mortgage loans for business expansion
- ‘Saral’ Property Loans – simplified mortgage products
- Working capital loans for manufacturing, trading, and service sectors
The average loan ticket size is approximately ₹1.5 lakh, targeting businesses with annual turnovers between ₹10 lakh and ₹1 crore. This segment, often referred to as the ‘missing middle,’ has limited access to traditional banking services due to lack of formal documentation and credit history.
Financial Performance
| Particulars | FY 2023 | FY 2024 | FY 2025 |
| AUM (₹ Crores) | 2,721.55 | 4,330 | 5,533.90 |
| Revenue (₹ Crores) | 566.40 | 948.69 | ~1,500 |
| Net Profit (₹ Crores) | 43.80 | 161.13 | 171.27 |
| Gross NPA (%) | 2.49% | 3.20% | 4.21% |
| Net NPA (%) | N/A | N/A | 1.40% |
Note: As of September 30, 2025, the AUM has grown to ₹6,027.62 crores, representing a CAGR of 42.60% from FY2023 to FY2025.
Check Also Fractal Analytics IPO GMP & Listing Gain
Key Strengths and Highlights
1. Strong Growth Trajectory
Aye Finance has demonstrated impressive growth with Assets Under Management (AUM) growing at a CAGR of 42.60% from ₹2,721.55 crores in FY2023 to ₹5,533.90 crores in FY2025, and further reaching ₹6,027.62 crores as of September 30, 2025.
2. Innovative Cluster-Based Underwriting
The company employs a proprietary cluster-based underwriting methodology, analyzing over 70 different business clusters. This approach, enhanced by data science models and AI/ML capabilities, allows Aye Finance to effectively assess credit risk among micro-enterprises that lack formal financial documentation.
3. Diversified Geographic Presence
Aye Finance maintains a well-diversified geographical footprint, being the most geographically diversified among its peers. As of September 30, 2025, the top 5 states contribute only 57% to AUM, with no single state accounting for more than 15.77%, effectively mitigating concentration risk.
4. Digital Operational Efficiency
The company has achieved significant operational efficiency through its phygital model. As of September 30, 2025, 98.84% of loan disbursements are digitally signed, and over 93.45% of active loans are managed via Automated Clearing House (ACH) mandates, reducing operational costs and improving collection efficiency.
5. Marquee Investor Base
Aye Finance is backed by prestigious investors including Elevation Capital, CapitalG (Alphabet’s growth fund), British International Investment PLC, Alpha Wave India, LGT Capital, and MAJ Invest, providing strong governance oversight and strategic guidance.
6. Access to Diversified Funding
The company has established relationships with 82 different lenders as of September 2025, ensuring diverse and cost-effective funding sources. The average cost of borrowings has been successfully reduced from 11.80% in FY2023 to 11.57% in FY2025.
Key Risks and Concerns
1. Deteriorating Asset Quality
A significant concern is the steady increase in Gross NPA ratio from 2.49% as of March 31, 2023, to 4.21% in FY2025, and further to 4.85% as of September 30, 2025. The 90+ days past due (dpd) ratio stands at 5.1% as of September 30, 2025, indicating rising credit risk.
2. High Employee Attrition
The company faces exceptionally high employee attrition rates, reaching 64.56% in FY2025 and 65.53% in the six months ended September 30, 2025. This high turnover could disrupt operations, increase recruitment and training costs, and potentially impact service quality and customer relationships.
3. Vulnerable Customer Segment
Aye Finance primarily serves marginal borrowers in the micro-enterprise segment whose cash flows can be volatile and highly sensitive to minor business disruptions, economic downturns, or external shocks. This inherent vulnerability in the customer base poses ongoing credit risk.
4. Regulatory Scrutiny
The company’s operations are subject to regulatory scrutiny from the Reserve Bank of India (RBI). An RBI inspection in FY2023 sought clarifications on internal audit coverage and underwriting practices. Additionally, statutory auditors have issued remarks on the company’s audit trail software in both FY2024 and FY2025.
5. Rising Credit Costs
Credit costs have been increasing, with write-offs as a proportion of gross advances rising to 4.1% in FY2025 (and 4.9% annualized in Q1 FY2026) from 1.3% in FY2024, putting pressure on profitability.
Objects of the Issue
The net proceeds from the fresh issue of ₹710 crores will be utilized for:
- Augmenting the company’s capital base to meet future capital requirements arising from the growth of its business and assets
- Ensuring compliance with regulatory capital adequacy ratios
- Supporting onward lending activities to expand the loan portfolio
The Offer for Sale (OFS) component of ₹300 crores allows existing shareholders including Alpha Wave India, MAJ Invest Financial Inclusion Fund, CapitalG, and others to partially exit their investments.
How to Apply for Aye Finance IPO
Investors can apply for the Aye Finance IPO through the following methods:
Through Your Broker
Most brokers like Zerodha, Upstox, Groww, Angel One, and others offer UPI-based IPO applications. Simply log in to your trading account, navigate to the IPO section, select Aye Finance IPO, enter your bid details (quantity and price), and submit. You will receive a UPI mandate on your registered UPI app which you need to approve.
Through Net Banking (ASBA)
You can also apply through your bank’s net banking portal using the ASBA (Application Supported by Blocked Amount) facility. The amount is blocked in your account until allotment.
Important Application Tips
- To maximize chances of allotment in case of oversubscription, bid at the cutoff price
- Ensure you have sufficient funds in your account before applying
- Remember to approve the UPI mandate in your UPI app before the issue closes
- Check the allotment status on the KFin Technologies website after February 12, 2026
Valuation Analysis
At the upper price band of ₹129 per share, the company is seeking a market capitalization of approximately ₹3,184 crores post-issue. Based on the FY2025 profit of ₹171.27 crores and assuming the post-issue equity, investors need to evaluate whether this valuation is attractive considering:
- The strong growth trajectory in AUM (42.60% CAGR)
- The increasing asset quality concerns (rising NPAs)
- The operational challenges (high employee attrition)
- Comparison with listed peers like SBFC Finance and Five Star Business Finance
Investment Perspective
For Long-Term Investors:
Aye Finance operates in a sector with significant growth potential. India’s MSME sector, particularly the micro-enterprise segment, remains vastly underserved by traditional banking. The company’s cluster-based approach and technology-driven operations provide a competitive edge. However, the deteriorating asset quality and high employee attrition are concerning trends that need to be monitored closely.
For Short-Term/Listing Gains Investors:
The lack of established GMP data makes it difficult to predict listing performance. Investors should wait for subscription trends and market sentiment before making decisions focused on listing gains.
Key Factors to Consider:
- Monitor the subscription numbers during the IPO period
- Compare valuation with peers like SBFC Finance and Five Star Business Finance
- Assess your risk appetite, especially regarding the rising NPA trend
- Consider the company’s ability to manage asset quality going forward
- Review the Red Herring Prospectus (RHP) available on SEBI’s website for complete details
Conclusion
The Aye Finance IPO presents an opportunity to invest in the financial inclusion story of India’s micro and small enterprises. With strong backing from marquee investors, innovative underwriting methods, and impressive growth numbers, the company has demonstrated its capability to serve an underserved market segment. However, the rising asset quality concerns, high employee attrition, and inherent risks in lending to marginal borrowers require careful consideration.
Potential investors should conduct thorough due diligence, review the complete Red Herring Prospectus available on the SEBI website, and assess their risk tolerance before making investment decisions. This IPO may be suitable for investors who understand the risks associated with NBFC lending to micro-enterprises and have a long-term investment horizon.
Disclaimer
IMPORTANT DISCLAIMER: This blog is for informational and educational purposes only and should not be construed as investment advice or a recommendation to buy or sell securities. The information provided is based on publicly available sources and has been compiled for general reference. Investors are strongly advised to conduct their own research, review the official Red Herring Prospectus filed with SEBI, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results, and all investments in equity markets carry risk. The author and publisher of this content do not accept any liability for any loss or damage incurred by investors based on the information provided herein.
Grey Market Premium Disclaimer: Grey market premiums mentioned in this document are unofficial and speculative in nature. They should not be relied upon as the sole basis for investment decisions. Grey market activities are not regulated and carry significant risk.
For the latest updates and detailed information, please visit the official SEBI website and review the Red Herring Prospectus.
Article Originally Written On : February 4, 2026
