Aye Finance IPO Day 2: Subscribed 15%; Check GMP, brokerage review and key details

Aye Finance’s Rs 1,010-crore initial public offering has seen muted demand so far on the second day of bidding, with overall subscription reaching 15% of the 4.55 crore shares on offer. Retail investors showed relatively stronger participation, subscribing to 37% of their allotted quota of 82.78 lakh shares.

In the grey market, the shares are currently trading at no premium, suggesting limited expectations of short-term listing gains. The three-day IPO will close on February 11, with the slow start reflecting cautious investor sentiment.

Aye Finance IPO subscription status

As of 11:45 am on Day 2, Aye Finance’s IPO witnessed muted demand, with overall subscription at 15% of the 4.55 crore shares on offer.

Retail Individual Investors (RIIs) showed relatively stronger interest, subscribing to 37% of their allocated 82.78 lakh shares, indicating higher participation from small investors compared with larger categories.

Demand from Non-Institutional Investors (NIIs), including high-net-worth individuals, remained weak, with just 1% of the 1.24 crore shares reserved for them subscribed so far.

Qualified Institutional Buyers (QIBs), such as mutual funds and insurance companies, had subscribed to 13% of their 2.48 crore share allocation.

Aye Finance IPO GMP

On February 10, Aye Finance’s IPO was quoting at a flat grey market premium of around 0%, indicating subdued investor interest. The muted sentiment highlights a cautious stance toward NBFC listings—particularly those exposed to micro and small enterprises—despite the company’s consistent profitability track record.

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)