Aye Finance IPO

Aye Finance is a leading NBFC focused on providing credit to the underserved micro-scale enterprises in India. Founded by Sanjay Sharma and Vikram Jetley, the company bridges the gap for small businesses like kirana stores, manufacturers, and traders who lack formal documentation. It operates via a "phygital" model, combining 500+ physical branches with a proprietary data-driven underwriting system.

Strengths:

• Specialized Underwriting: The company uses "Cluster-Based Underwriting," which allows them to assess the cash flows of businesses in specific sectors (e.g., shoe manufacturing in Agra) where traditional collateral is unavailable.
• Fastest Growing in Segment: As of Sept 2024, Aye Finance is among the fastest-growing NBFCs in the MSME space, with an AUM CAGR of ~60% between FY22-FY24.
• Diversified & Scalable: They serve over 5 lakh active customers across 18 states and 3 UTs. Their portfolio is granular, reducing the risk of large-ticket defaults.
• Marquee Backing: The company is backed by blue-chip investors including Capital G (Google), Elevation Capital, and British International Investment, lending high credibility.

Growth:

• Expansion of Branch Network: The company is aggressively expanding into South and West India to reduce regional concentration in North India.
• Shift to Secured Lending: While historically focused on hypothecation loans, Aye is growing its "Mortgage Loan" (LAP) segment to improve asset quality and yield stability.
• Technology Integration: Investment in AI and machine learning for credit scoring is helping reduce the cost-to-income ratio, which improved by 32% over the last three years.