Aye Finance IPO Day 1: Retail subscription of 15%, GMP weak. What real estate agents say

Aye Finance on Monday launched its initial public offering (IPO) to raise Rs 1,010 crore. On the first day of the offer, the issue was subscribed by only 3% of the total offered shares of Rs 4.55 crore. The demand was largely driven by retail investors, who subscribed to 15% of their allotted shares of Rs 82.78 lakh.
The IPO will remain open for three days and close on February 11. The muted reaction to the debut reflects cautious investor sentiment, in line with subdued gray market activity.

Aye Finance IPO Subscription Status:

According to BSE data, the IPO was subscribed to a total of 3% as of day 1 at 11.30 am. Retail Individual Investors (RIIs) topped the demand and subscribed to 15% of their allotment of shares of Rs 82.78 lakh.

In contrast, non-institutional investors (NIIs) did not place any bids for the shares reserved for them of Rs 1.24 crore, while Qualified Institutional Buyers (QIBs) also remained on the sidelines, with no bids on their share allotment of Rs 2.48 crore.The early trend indicates that the issue is currently mainly attracting interest from retail investors, while institutional participation still needs to increase.

World Finance IPO GMP

Aye Finance’s IPO enters the market with a flat gray market premium, currently hovering around 0%. The lack of enthusiasm in the gray market reflects a more measured investor approach to NBFC listings, especially those with exposure to micro and small enterprises, even as the company has demonstrated consistent profitability.

Aye Finance IPO details

The Rs 1,010 crore IPO consists of a fresh issue of Rs 710 crore and an offer for sale of Rs 300 crore by existing shareholders. At the higher end of the price range, the company’s pre-issue market capitalization is estimated at around Rs 3,184 crore.

For retail investors, the minimum application size is 116 shares, which means an investment of Rs 14,964 in the higher price bracket.

The IPO is priced between Rs 122 and Rs 129 per share. The issue closes on February 11 and the shares are expected to be listed on the BSE and NSE on February 16.About company

Established in 1993, Aye Finance is a mid-sized Non-Banking Financial Company (NBFC) that provides both secured and unsecured business loans to micro-SMEs. The portfolio includes mortgage loans, mortgage-backed loans and ‘Saral’ real estate loans, which are primarily intended to support working capital needs and business expansion for enterprises in the manufacturing, trading, services and related sectors.The company operates through an industry-led, technology-driven model, combining local market insights with data-driven credit evaluation to serve borrowers who often have limited formal credit history.

Financial performance

Financially, the company has shown steady growth in recent years. Total income rose 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 earlier.

Profitability figures have remained healthy, with EBITDA margins above 45% in FY25. Return on equity this year was approximately 12.1%, reflecting a balance between growth and capital efficiency

Should you subscribe?

Brokers’ opinions on the IPO remain mixed to cautious. Swastika Investmart has given the issue a ‘neutral’ rating, pointing to reasonable valuations but emphasizing sector-specific risks.

“Aye Finance implies a price-to-earnings ratio of around 14x on FY25 earnings, which appears reasonably priced compared to some listed NBFC peers. The fundamentals are solid with consistent revenue and earnings growth, but the company carries inherent risks due to its exposure to micro-enterprises and unsecured loans,” the broker said in its note.

Analysts at Swastika added that the IPO could suit long-term investors who are convinced of MSME credit growth and are comfortable with moderate credit risk from the NBFC, rather than investors looking for short-term gains. According to them, the flat gray market premium reinforces expectations of a largely fundamental-driven response rather than speculative interest.

Within the peer group, Aye Finance compares itself with listed MSME-focused lenders such as SBFC Finance and Five-Star Business Finance. While valuation ratios are lower than some peers, return ratios are also more moderate, reflecting credit mix and geographic diversification.

The company has no identifiable promoter under current regulations, which analysts say places more emphasis on governance standards and management execution.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)