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Aye files DRHP for Rs 1,450 Cr IPO; largest backer Elevation skips OFS

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Capital G-backed microlending platform Aye (formerly Aye Finance) has filed its draft red herring prospectus (DRHP) with the Security Exchange Board of India (SEBI) for an initial public offering (IPO) on Monday. According to the DRHP, the company aims to raise a total of Rs 1,450 crore through its IPO. This includes a fresh issue of equity shares worth Rs 885 crore (approximately $105 million) and an offer for sale (OFS) amounting to Rs 565 crore (approximately $67 million). LGT Capital and Capital G will divest Rs 150 crore and 136.8 crore worth of shares in OFS (offer for sale), respectively, while A91 Fund and Alpha Wave will offload Rs 100 crore each in the secondary sale. MAJ Invest, along with Harleen Kaur Jetley and Vikram Jetley, will sell Rs 78 crore worth of shares at the same time. Notably, Elevation Capital, being the largest shareholder, is not participating in Aye Finance's offer for sale. The equity shares offered through the RHP are proposed to be listed on the BSE and NSE with the help of lead managers like Axis Capital, IIFL Capital, JM Financial, and Nuvama Wealth Management. Aye Finance offers three loan products with values ranging from Rs 50,000 to Rs 1,000,000: quasi-mortgage loans, hypothetical loans, and add-on loans. It operates across 398 locations in 22 states in India, providing financial services to micro and small enterprises, primarily in manufacturing, trading, and service industries. As per RHP, Elevation Capital (formerly SAIF Partners) is the largest external stakeholder with 16.19% followed by LGT Capital and Alpha Wave which hold 14.13% and 11.21%, respectively. Other notable investors include CapitalG at 10.26%, BII at 9.51%, and A91, which holds 9.23% in the company. During the previous fiscal year (FY24), Aye recorded a revenue of Rs 1,040 crore with profits standing at Rs 172 crore in the same period. Moreover, the first half of the ongoing fiscal year (H1FY25) has been impressive for the company, where it posted a revenue of Rs 692 crore with a profit of Rs 144 crore. The company ended FY24 with assets under management (AUM) of Rs 4,463 crore, while its AUM grew to Rs 4,980 crore H1FY25. According to startup data intelligence platform TheKredible, Aye Finance has raised Rs 2,610 crore (more than $300 million) in total funding including Rs 1,250 crore ($150 million) in equity. It competes with several NBFCs including Indifi, Axio (formerly Capital Float), Lendingkart, Flexiloans and others.