Aye Finance: Aye Finance files draft papers for Rs 1,450 crore IPO

Aye Finance is looking to raise Rs 1,450 crore through an initial public offering, the A91 Partners and Google’s CapitalG-backed company said in a draft red herring prospectus filed with the Securities and Exchange Board of India.

The IPO will include a fresh issue of shares worth Rs 885 crore and an offer for sale of Rs 565 crore shares held by existing investors, the company said in its December 16 filing.

A91 Partners, CapitalG and Alpha Wave will be selling their stake through the IPO. Other selling shareholders include LGT Capital, MAJ Invest Financial, Harleen Kaur Jetley and Vikram Jetley.

After Paytm, PolicyBazaar and MobiKwik, Aye Finance is set to become the fourth technology-backed financial services company to go public.

On September 20, Gurugram-based Aye Finance raised Rs 250 crore in a pre-IPO equity round led by ABC Impact, a Singapore-based impact investment fund backed by Temasek, valuing the firm at around $400 million (nearly Rs 3,400 crore at current exchange rates).

Prior to this, Aye Finance secured $25 million through a securitisation deal from Goldman Sachs (India) Finance, the local non-banking unit of American financial services company Goldman Sachs.

Elevation Capital V (formerly SAIF Partners India V) is the largest shareholder in the company with a 16.19% stake, followed by LGT Capital Invest Mauritius with 14.13% and Alpha Wave India with 11.21%.CapitalG LP and CapitalG International hold 10.26% and 3.01% stake, respectively, while British International Investment owns 9.51%.

A91 Emerging Fund I LLP holds a 9.23% stake and Sanjay Sharma, managing director of Aye Finance, has a 2.89% stake.

Founded in 2014, Aye Finance provides loans to micro, small and medium enterprises. The company focuses on bridging the credit gap for underserved businesses that lack access to traditional banking services.

Axis Capital, IIFL Capital Services, JM Financial and Nuvama Wealth Management are the book-running lead managers for the issue.

The recent IPO of MobiKwik received strong demand, with the issue being oversubscribed nearly 120 times, driven by its attractive pricing and small size. The IPO price band for MobiKwik was set between Rs 265 and Rs 279. The stock is scheduled to list on Wednesday.