Aye Finance IPO 2026: Key Details of the ₹1,010 Crore Issue

Introduction to Aye Finance IPO

MSME-focused non-banking financial company (NBFC) Aye Finance is launching its initial public offering (IPO) on February 9, 2026. The company aims to raise ₹1,010 crore through a combination of a fresh issue of shares and an offer for sale (OFS) by existing shareholders. The public issue will be open for subscription for three days, closing on February 11, 2026. The shares are scheduled to be listed on both the BSE and NSE on February 16, 2026. This IPO provides investors an opportunity to participate in the growth of a lender dedicated to India's micro, small, and medium enterprises sector.

Issue Size and Structure

The total size of the IPO is ₹1,010 crore. This is structured as a fresh issue of shares worth ₹710 crore and an offer for sale of shares amounting to ₹300 crore. The fresh issue proceeds are intended to augment the company's capital base to meet future capital requirements and support business growth. The OFS component allows some of the company's early investors to offload their stakes. At the upper end of the price band, the IPO values Aye Finance at approximately ₹3,183 crore.

Price Band, Lot Size, and Investment

Aye Finance has set the price band for its IPO at ₹122 to ₹129 per equity share. Investors can bid for shares in a minimum lot size of 116 shares and in multiples of 116 shares thereafter. For retail investors, the minimum investment required to apply for one lot is ₹14,964 at the upper end of the price band. The issue has a reservation structure where 75% of the shares are allocated to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Investors (NIIs), and the remaining 10% is reserved for retail investors.

Company Background and Business Model

Founded in 2014 by Sanjay Sharma and Vikram, Aye Finance has established itself as a key lender to micro-enterprises in India. The company provides small-ticket business loans, including working capital and business expansion loans. These loans are typically secured against the hypothecation of working assets or property. Aye Finance caters to a diverse customer base across various sectors, including manufacturing, trading, services, and allied agriculture, addressing a critical credit gap for businesses that often lack access to formal banking channels.

Financial Performance Overview

The company's financial performance shows a mixed picture. For the first half of the financial year 2026 (H1FY26), Aye Finance reported a 21.8% increase in operating revenue, which rose to ₹843.5 crore from ₹692.2 crore in the same period of the previous year (H1FY25). However, its net profit saw a significant 40% decline, falling to ₹64.6 crore from ₹106.8 crore year-on-year. According to analysts, this drop in profit was primarily driven by a sharp rise in impairment costs, compression in Net Interest Margins (NIM), and higher operating expenses.

Anchor Investor Participation

Ahead of the public issue, Aye Finance successfully raised ₹454.5 crore from a group of prominent anchor investors. This demonstrates strong institutional interest in the company. The participants in the anchor round included domestic and international institutions such as Bank of India, Nippon Life India, Goldman Sachs, Societe Generale, BNP Paribas, New York State Teachers Retirement System, and Ashoka India, among others.

Details of the Offer for Sale

The ₹300 crore offer for sale involves several existing shareholders partially divesting their holdings. The selling shareholders include Alpha Wave India, MAJ Invest Financial Inclusion Fund, Alphabet-backed CapitalG, LGT Capital, and Vikram Jetley. Elevation Capital is the largest shareholder in the company with a 16.03% stake, followed by LGT Capital (13.99%) and CapitalG (13.14%).

Brokerage Views and Recommendations

Brokerages have offered varied perspectives on the IPO. SBI Securities has recommended an 'Avoid' rating. Their rationale points to the company's high credit cost, which stood at an annualized 7% in H1FY26. They also noted the decline in profit and suggested that investors should monitor the company's progress in reducing credit costs through its new strategy of focusing on mortgage-heavy loans. In contrast, Sushil Finance has recommended that investors can invest in the issue with a long-term horizon, citing the company's exposure to the growing micro-MSME sector.

Grey Market Premium (GMP) Analysis

As of early February 2026, the Grey Market Premium (GMP) for the Aye Finance IPO has been reported in the range of ₹1 to ₹7 per share. This indicates neutral to moderate interest in the grey market ahead of the listing. A GMP of ₹7 on the upper price band of ₹129 suggests a potential listing price of around ₹136. It is important for investors to note that GMP is an unofficial indicator and is not a reliable predictor of listing performance.

Key IPO Dates

Conclusion

Aye Finance's ₹1,010 crore IPO presents a unique investment case focused on India's MSME credit market. While the company has demonstrated strong revenue growth and attracted significant anchor investment, concerns about its recent profitability decline and high credit costs remain. With mixed recommendations from brokerages and a modest grey market premium, investors should carefully evaluate the company's financial health, strategic shifts, and the inherent risks of the NBFC sector before subscribing. The company's performance post-listing on February 16 will be closely watched.