On Day 1, the IPO was largely undersubscribed, attracting bids for just 12% of the total 4.55 crore shares on offer. Demand was primarily driven by retail investors, who subscribed 26% of their allotted 82.78 lakh shares.
Aye Finance IPO GMP
On February 10, Aye Finance’s IPO was trading with a flat grey market premium of around 0%, reflecting muted investor interest. This cautious sentiment underscores a careful approach to NBFC listings, especially those with exposure to micro and small enterprises, even though the company has maintained a consistent record of profitability.Aye Finance IPO subscription status
On Day 1, Aye Finance’s IPO saw a low overall subscription of just 12% against the total 4.55 crore shares on offer, indicating a cautious start to the issue.
Retail Individual Investors (RIIs) showed relatively strong interest, applying for 26% of the 82.78 lakh shares allocated to them. This suggests that small individual investors were more willing to participate than larger investors.
Non-Institutional Investors (NIIs), which include high-net-worth individuals, have so far applied for only 1% of the 1.24 crore shares reserved for them, showing very limited demand from this segment.Qualified Institutional Buyers (QIBs), such as mutual funds and insurance companies, did not place any bids for the 2.48 crore shares allocated to them, signaling hesitation among large institutional investors.
Aye Finance IPO details:
The Rs 1,010 crore IPO of Aye Finance comprises a fresh issue of Rs 710 crore and an offer for sale of Rs 300 crore by existing shareholders. At the upper end of the price band, the company’s pre-IPO market capitalization is estimated at around Rs 3,184 crore.
For retail investors, the minimum application size is 116 shares, translating to an investment of Rs 14,964 at the upper price band.
The IPO is priced between Rs 122 and Rs 129 per share. It closes on February 11, and the shares are expected to list on the BSE and NSE on February 16.
About the Company
Founded in 1993, Aye Finance is a mid-sized non-banking financial company (NBFC) that offers both secured and unsecured business loans to micro-scale MSMEs. Its product suite includes hypothecation loans, mortgage-backed loans, and ‘Saral’ property loans, primarily aimed at supporting working capital needs and business expansion for enterprises in manufacturing, trading, services, and related sectors.
The company operates through a branch-led, technology-enabled model, combining local market knowledge with data-driven credit assessment to serve borrowers who often have limited formal credit histories.
Financial performance
Aye Finance has demonstrated consistent financial growth in recent years. Total income increased to Rs 1,505 crore in FY25 from Rs 643 crore in FY23, while net profit rose sharply to Rs 175.25 crore in FY25 from Rs 39.87 crore two years prior.
Profitability has remained robust, with EBITDA margins exceeding 45% in FY25. Return on equity for the year was approximately 12.1%, reflecting a healthy balance between growth and capital efficiency.
Should you subscribe?
Brokerage views on the IPO remain mixed-to-cautious. Swastika Investmart has assigned a “neutral” rating to the issue, pointing to reasonable valuations but highlighting sector-specific risks.
“Aye Finance is implying a P/E multiple of around 14x based on FY25 earnings, which appears reasonably priced compared with some listed NBFC peers. Fundamentals are solid with consistent revenue and profit growth, but the business carries inherent risks due to its exposure to micro enterprises and unsecured lending,” the brokerage said in a note.
Analysts at Swastika added that the IPO may be suitable for long-term investors who have conviction in MSME credit growth and are comfortable with moderate NBFC credit risk, rather than those looking for short-term listing gains. The flat grey market premium, they said, reinforces expectations of a largely fundamentals-driven response rather than speculative interest.
Within the peer group, Aye Finance compares with listed MSME-focused lenders such as SBFC Finance and Five-Star Business Finance. While its valuation multiple is lower than some peers, its return ratios are also more moderate, reflecting its loan mix and geographic spread.
The company does not have an identifiable promoter under current regulations, which analysts say places greater emphasis on governance standards and management execution.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)