Aye Finance IPO Makes Flat Debut then Declines, Lists at ₹129 Against Barely Subscribed 1.04x Subscription

Aye Finance Ltd, an NBFC incorporated in 1993 offering secured and unsecured small business loans for working capital including mortgage loans, 'Saral' Property Loans, secured and unsecured hypothecation loans primarily to micro-scale MSMEs providing business loans for business expansion secured by working assets or property to customers in manufacturing, trading, service, and allied agriculture sectors serving 586,825 active customers across 18 states and three union territories with significant assets under management employing 10,459 full-time employees as of September 30, 2025, made a weak debut on BSE and NSE on Monday, February 16, 2026. After closing its IPO bidding between February 9-11, 2026, the company commenced trading flat at issue price of ₹129.00, touched high of ₹132.75 (up 2.91%) before declining sharply to ₹120.60 (down 6.51%) and trading around ₹123.45 (down 4.30% from issue price).

Aye Finance Listing Details

Aye Finance share launched its IPO at ₹129 per share with minimum investment of 116 shares costing ₹14,964. The IPO barely scraped through with subscription of only 1.04 times - retail investors undersubscribed at 0.81 times, NII severely undersubscribed at 0.05 times (bNII at dismal 0.02 times, sNII at 0.11 times), QIB at 1.62 times, total applications of only 43,797 indicating extremely weak investor confidence in MSME financing business with analyst noting issue appears aggressively priced with stagnant bottom line concerns.

First-Day Trading Performance

Listing Price: Aye Finance opened at ₹129.00 representing flat listing at issue price of ₹129.00, initially touched high of ₹132.75 (up 2.91%) before declining sharply to low of ₹120.60 (down 6.51%), trading around ₹123.45 (down 4.30%), with VWAP at ₹124.96, reflecting weak market sentiment as selling pressure mounted creating losses for IPO investors with turnover of ₹5.59 crore, traded volume of 4.48 lakh shares, delivery percentage of 46.88%, and market capitalisation of ₹3,046.55 crore against pre-IPO market cap of ₹3,183.52 crore.

Growth Drivers and Challenges

Growth Drivers:

• Leading MSME Lender: Leading lender of small-ticket loans to micro-scale MSMEs with comprehensive product offerings including mortgage loans, Saral Property Loans, secured and unsecured hypothecation loans serving large and unaddressed total addressable market.
• Pan-India Presence: Strong sourcing capabilities supported by diversified presence across 18 states and 3 union territories with high customer retention serving 586,825 active customers with effective underwriting methodology.
• Diversified Funding: Access to diversified lender base with cost-effective financing, robust multi-tiered collection capabilities, and building resilience through technological prowess.
• Consistent Growth: Assets under management growing from ₹3,126 crore in FY23 to ₹6,338.63 crore in FY25, total income growing from ₹643.34 crore to ₹1,504.99 crore in same period with experienced management team backed by marquee investors.

Challenges:

• Severe NII Undersubscription: IPO barely subscribed at 1.04 times with NII at dismal 0.05 times (bNII at 0.02 times) and retail undersubscribed at 0.81 times indicating complete rejection by informed investors.
• Aggressive Pricing: Analyst notes issue appears aggressively priced at post-IPO P/E of 24.64x with stagnant bottom line for last two fiscals and lower H1 FY26 profit following market conditions.
• Bottom Line Concerns: PAT of ₹64.60 crore in H1 FY26 versus ₹107.80 crore in H1 FY25, FY25 PAT of ₹175.25 crore similar to FY24's ₹171.68 crore indicating stagnation despite revenue growth.
• High Leverage: Debt-to-equity ratio of 3.02 with total borrowings of ₹5,218.50 crore against net worth of ₹1,727.37 crore typical for NBFC but concerning given weak subscription and listing.

Utilisation of IPO Proceeds

• Augmenting Capital Base: Fresh issue proceeds of ₹710 crore to be utilised for augmenting capital base to meet future capital requirements arising out of growth in business and assets.
• Offer for Sale: ₹300 crore OFS proceeds to selling shareholders with no direct benefit to company.

Financial Performance

• Revenue: ₹863.02 crore for H1 FY26, ₹1,504.99 crore for FY25, growth from ₹1,071.75 crore in FY24 and ₹643.34 crore in FY23, reflecting expanding MSME lending operations across 18 states and 3 union territories.
• Net Profit: ₹64.60 crore in H1 FY26, ₹175.25 crore in FY25, versus ₹171.68 crore in FY24, demonstrating stagnant profitability with post-IPO EPS of ₹5.24 and P/E of 24.64x.