Aye Finance, an Indian small and medium-sized business lender, aims to raise $171 million in an initial public offering, it said in a filing on Tuesday.
The offering consists of a $104 million issuance of new shares and a $67 million secondary sale to existing investors. Proceeds from the IPO will be used to expand the startup's financing portfolio and strengthen its capital base.
The lender, which is backed by Alphabet's venture arm Capital G, is currently valued at about $400 million and operates 499 branches across 22 states in India. Assets under management as of September were $588 million.
Aye Finance provides business loans, including home loans, collateral and term credit, to small and medium-sized enterprises in the unorganized sector that are typically excluded from the traditional banking system. The average loan size is about $1,800, and the company says it uses proprietary technology and analytics to assess a customer's creditworthiness.
The company's revenue reached $122.5 million in the fiscal year ended 2024, while non-performing assets increased from 2.74% to 3.29%.
The startup, whose backers include Elevation Capital and British International Investment, has raised more than $160 million to date.
Aye Finance's IPO prospectus filing capped off a record year for IPOs in India. Financial services startup MobiKwik is about to go public, while Swiggy's IPO last month was the largest for a tech startup in the world this year.
The filing comes at a critical time for India's financial services sector. The MSME segment accounts for around 30% of India's GDP but faces a large credit gap estimated at over $650 billion.
Axis Capital, IIFL Capital, JM Financial and Nuvama Wealth Management are the bookrunners for Aye Finance.