Aye Finance IPO: Alphabet-Backed MSME Lender Ready for its Market Debut
Aye Finance, a prominent NBFC backed by Google’s parent company Alphabet (via CapitalG) and Elevation Capital, is set to open its ₹1,010 crore IPO on February 9, 2026. This blog covers the fixed price band of ₹122–₹129, the company’s "cluster-based" lending model, and the latest Grey Market Premium (GMP) signals.
Live IPO Tracking Available
Check live GMP, allotment status, and deep analysis for this IPO.
1. Who is Aye Finance Limited?
Founded in 2014, Aye Finance is a Gurugram-based Non-Banking Financial Company (NBFC) that specializes in providing credit to the "missing middle"—micro-enterprises that are too small for commercial banks but too large for microfinance.
Operational DNA:
Cluster-Based Lending: They use a unique "cluster" approach, studying specific industry hubs (like leather in Kanpur or textiles in Tirupur) to design custom credit scoring for informal businesses.
Marquee Backing: Rare for an SME-focused lender, it counts Google (CapitalG), Elevation Capital, and British International Investment (BII) as its primary investors.
Presence: Operates over 520 branches across 21 states, serving nearly 6 lakh active customers.
2. Key IPO Details & Timeline (Confirmed)
The company has finalized its offer structure, which is a mix of a fresh issue to fuel growth and an offer for sale by existing investors.
| Event / Detail | Status / Date |
|---|---|
| Bidding Period | Monday, Feb 9 – Wednesday, Feb 11, 2026 |
| Price Band | ₹122 to ₹129 per share |
| Market Lot Size | 116 Shares |
| Min. Retail Investment | ₹14,964 |
| Total Issue Size | ₹1,010 Crore |
| Anchor Bidding | Today, February 6, 2026 |
| Allotment Date | Thursday, February 12, 2026 |
| Listing Date | Monday, February 16, 2026 |
| Listing Exchange | NSE & BSE (Mainboard) |
3. Financial Performance: Scaling Profitably
Aye Finance has shown consistent growth, though it faces the typical asset quality challenges of the MSME sector:
Revenue: Reached ₹1,505 crore in FY25, a 40% jump from the previous year.
Profitability: Reported a net profit of ₹175.3 crore (FY25). For the first half of FY26 (H1 ending Sept 2025), PAT stands at ₹64.6 crore.
Asset Quality: Gross NPA (Non-Performing Assets) increased slightly to 4.21% in FY25, reflecting the stress in the micro-enterprise segment.
Valuation: The IPO is priced at a Price-to-Book (P/B) value of approximately 1.45x, which is considered attractive compared to peers like Five-Star Business Finance.
4. Grey Market Premium (GMP) Update
As of February 6, 2026, the GMP for Aye Finance is ₹1.
Market Sentiment: The current GMP suggests a very conservative listing with a projected gain of ~0.8%. However, the anchor book (which includes institutional giants) is expected to provide more direction once the bidding data is released tonight.
5. Strategic Use of Proceeds
₹710 Crore (Fresh Issue): 100% of these funds will be used to augment the company's capital base. This will allow them to expand their loan book and meet future lending requirements.
₹300 Crore (Offer for Sale): This portion goes to the selling shareholders (early investors like CapitalG and A91 Emerging Fund), allowing them a partial exit.
6. Investment Analysis: Strengths vs. Risks
Strengths:
Deep Tech Integration: Proprietary "AyeScore" algorithm allows them to lend to businesses without formal financial papers.
Strong Liquidity: Adequate cash reserves and a diversified lender base (over 60 lenders).
Underserved Market: MSME credit gap in India is massive, providing a long runway for growth.
Risks:
Unsecured Exposure: A significant portion of the book is unsecured or semi-secured, making it sensitive to economic downturns.
Regulatory Changes: As an NBFC-ML (Middle Layer), they are subject to strict RBI oversight regarding capital adequacy.
7. Conclusion: A Fundamental Play for Patient Investors
Aye Finance isn't showing the high-speculative "listing pop" that some tech IPOs enjoy, but its fundamentals and high-profile backing make it a strong candidate for long-term portfolios. It is a pure play on the formalization of India’s micro-economy.