Alphabet-backed Indian lender files for $171m IPO

Aye Finance, a lender targeting small and medium businesses in India, is looking to raise $171 million in an initial public offering. announced In a filing Tuesday.

The offering consists of a fresh share issue of $104 million and a secondary sale of $67 million by existing investors. The proceeds from the IPO will be used to expand the startup’s loan portfolio and strengthen its capital base.

Backed by Alphabet’s venture arm CapitalG, the lender is currently valued at around $400 million and has 499 branches across 22 states in India. As of September, it had $588 million in assets under management.

Aye Finance provides business loans – including mortgages, mortgages and term loans – to small businesses. unorganized sector usually excluded from traditional banking systems. Its average loan is about $1,800, and the company says it uses proprietary technology and analytics to assess its customers’ creditworthiness.

In the fiscal year ending 2024, the company’s revenue reached $122.5 million, but its non-performing assets rose from 2.74% to 3.29%.

The startup, which is also backed by Elevation Capital and British International Investment, has raised more than $160 million to date.

Aye Finance’s IPO prospectus filing caps a record year for Indian IPOs. A financial services startup is MobiKwik coming soon to the publicSwiggy, on the other hand, did its IPO last month the largest among global tech startups this year.

The filing also comes at a critical juncture for India’s financial services sector. The micro, small and medium enterprise segment accounts for about 30% of India’s GDP, but faces significant credit gaps estimated at over $650 billion.

Axis Capital, IIFL Capital, JM Financial and Nuvama Wealth Management are underwriters for Aye Finance.