Aye Finance a Bengaluru-based non-banking finance company (NBFC) specialising in small business loans for micro, small, and medium enterprises (MSMEs) launched its Initial Public Offering (IPO) in February 2026. The issue, sized at around ₹1,010 crore, marks one of the notable listings in the financial sector this year, giving investors an opportunity to participate in the growth of a lender focused on India’s underserved “missing middle.” The IPO’s progress, pricing, and early investor sentiment offer a window into how the public markets are valuing MSME focused lenders in the current environment.
Author : Aashiya Jain | EQmint | Corporate Announcements
IPO Structure, Price Band and Key Dates
The Aye Finance IPO opened for subscription on 9 February 2026 and closed on 11 February 2026. Priced within a band of ₹122 to ₹129 per share, it comprises both a fresh issue (around ₹710 crore) and an Offer For Sale (OFS) of shares worth roughly ₹300 crore.
The issue follows a book built process with a minimum lot size of 116 shares, making the minimum investment about ₹14,964 at the upper band. Aye Finance’s IPO allocates 75 % to institutional investors (QIBs), 15 % to non-institutional (HNI) investors, and 10 % to retail participants. Allotment was scheduled for 12 February 2026, with listing expected on both the BSE and NSE on 16 February 2026.
Business Model and Growth Story
Incorporated in 1993, Aye Finance has carved out a niche by providing secured and unsecured small business loans to MSMEs that often struggle to access traditional bank credit. Its product range includes mortgage loans, property loans, secured hypothecation and unsecured hypothecation loans aimed at helping small businesses meet working capital and expansion needs. By September 2025, the company operated in 18 Indian states and 3 union territories, with an AUM (Assets Under Management) of around ₹6,027.6 crore and over 5.8 lakh active customers.
Industry reports also note that Aye Finance uses a cluster based underwriting model, analysing cash-flow patterns of specific micro-business clusters to tailor credit assessment rather than relying solely on traditional credit parameters an approach that sets it apart from many peers.
Financially, Aye Finance presented steady top-line growth, with revenue rising to around ₹1,504.99 crore in FY2025 from ₹1,071.75 crore in FY2024, while profit touched ₹175.25 crore in FY2025. Net interest income nearly climbed to ₹858 crore, up roughly 38 % year-on-year.
How the Markets Responded Initially
On the first day of subscription, the IPO saw modest interest, with total bids at about 0.13 times the issue size by late afternoon a sign of cautious sentiment among investors. Institutional and non-institutional demand remained subdued, while retail appetite ticked higher relative to its share quota.
Grey market indicators suggested a mild premium, with unofficial data showing a possible gap between IPO price and expected listing price around ₹4-₹5 per share, indicating tentative optimism among some market participants.
Positioning and What to Expect
Aye Finance’s IPO comes at a time when NBFCs focused on MSME lending are gaining attention due to the significant credit gap in India’s small business segment. Its diversified product suite and pan-India presence aim to capture demand from micro and small enterprises that traditional banks often overlook.
However, prospective investors should balance growth potential with key risks. Industry analysis points to rising GNPA ratios and a substantial portion of unsecured loans, which can amplify credit risk during economic cycles. Aye Finance has also faced notes related to operational metrics like cash flows and workforce attrition, which markets will watch post listing.
Some analysts view the pricing as relatively reasonable compared to peers with valuation multiples not stretched offering potential room for long-term growth if asset quality remains stable and AUM continues to expand.
Conclusion
The Aye Finance IPO represents a significant opportunity to invest in a specialist NBFC targeting a large underserved segment of the Indian economy. While early subscription activity was cautious, the company’s solid financial performance, diversified loan products and strategic underwriting model provide a compelling growth narrative. As the listing date approaches and all share allotments finalise, investors will be watching how retail and institutional demand shapes the stock’s market debut.
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Source link: IPO Watch
Disclaimer: This article is not an investment advice and is for educational purpose only
