Aye Finance IPO: The initial public offering (IPO) of non-banking financial company (NBFC) Aye Finance continued to witness a muted response from investors on the second day of bidding. As per data available on the National Stock Exchange (NSE), the Rs 1,010-crore public issue was subscribed 16 per cent by the end of Day 2.
The IPO received bids for 72,85,960 shares against the total 4,55,32,785 shares on offer, reflecting cautious investor sentiment. While retail investors showed relatively better participation, institutional and high-net-worth individual (HNI) interest remained subdued.
Subscription Status: Segment-Wise Breakdown
The IPO’s overall subscription stood at 16 per cent on Tuesday, the second day of the issue. Here is how different investor categories responded:
- Retail Individual Investors (RIIs): 47% subscription
- Qualified Institutional Buyers (QIBs): 13% subscription
- Non-Institutional Investors (NIIs/HNIs): 2% subscription
Retail participation was comparatively stronger, nearing half of the allocated quota. However, the lack of strong demand from QIBs and NIIs indicates that institutional investors are taking a cautious approach toward the issue.
On the first day of bidding (Monday), the IPO had received a 12 per cent subscription, meaning that incremental demand on Day 2 was modest.
The public issue is scheduled to close on February 11, giving investors one more day to participate.
IPO Details: Price Band and Issue Structure
Aye Finance has set the price band for the IPO at Rs 122 to Rs 129 per share. At the upper end of the price band, the company is valued at approximately Rs 3,184 crore.
The IPO comprises two components:
- Fresh Issue: Equity shares worth up to Rs 710 crore
- Offer for Sale (OFS): Shares worth up to Rs 300 crore by existing shareholders
The fresh issue proceeds will be utilized primarily to strengthen the company’s capital base. This capital infusion will support future business expansion and help fund the growing asset base of the company.
The shares of Aye Finance are scheduled to list on both the BSE and NSE on February 16.
Anchor Investor Participation
Ahead of the IPO opening for public subscription, Aye Finance raised Rs 454.5 crore from anchor investors on Friday. Anchor participation often reflects preliminary institutional confidence in the issue.
However, despite the strong anchor book allocation, the lukewarm subscription from QIBs during the main IPO window suggests that broader institutional participation remains measured.
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Business Overview: Focus on Micro and Small Enterprises
Aye Finance operates as a middle-layer NBFC, primarily focusing on lending to micro and small enterprises (MSEs). This segment remains significantly underserved by traditional banking institutions due to documentation challenges, lack of formal credit history, and limited collateral availability.
The company aims to bridge this gap by offering:
- Business loans
- Working capital loans
- Secured and unsecured lending products
- Customized credit assessment models
By targeting small entrepreneurs and informal sector businesses, Aye Finance plays a crucial role in supporting grassroots-level economic activity.
Operational Footprint and Financial Scale
As of September 30, 2025, Aye Finance had a strong operational presence across:
- 18 States
- 3 Union Territories
The company serves approximately 5.9 lakh active customers, demonstrating a wide reach in the micro and small enterprise ecosystem.
Its Assets Under Management (AUM) stood at Rs 6,027.6 crore, indicating consistent portfolio expansion over the years.
The NBFC sector has seen increased regulatory scrutiny in recent years, but middle-layer NBFCs like Aye Finance operate within a defined compliance framework under RBI supervision.
Market Sentiment and Investor Caution
The moderate response to the IPO can be attributed to multiple factors:
- Market Volatility: Broader equity markets have been experiencing fluctuations, making investors selective.
- NBFC Sector Sensitivity: Investors remain cautious about asset quality and credit risk in the NBFC segment.
- Valuation Concerns: Some investors may be evaluating whether the valuation at Rs 3,184 crore fully reflects growth potential and risk profile.
Retail investors, however, appear relatively optimistic about the company’s growth prospects, given the 47 per cent subscription in the retail segment.
Institutional investors often assess long-term asset quality, provisioning norms, and macroeconomic trends before committing large capital allocations.
Growth Outlook for Aye Finance
The micro and small enterprise segment in India continues to expand rapidly, driven by:
- Increased formalization of businesses
- Digital lending platforms
- Government-backed MSME initiatives
- Expanding credit demand in semi-urban and rural areas
If managed prudently, Aye Finance stands to benefit from structural growth in MSME financing.
The company plans to deploy fresh capital to strengthen its balance sheet, enabling it to:
- Expand branch network
- Enhance credit underwriting systems
- Improve technology infrastructure
- Increase loan disbursement capacity
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What Happens Next?
With the IPO closing on February 11, final subscription numbers will determine listing sentiment. If subscription improves significantly on the final day, it could support a stable listing.
The company is scheduled to debut on stock exchanges on February 16, and market watchers will closely monitor listing performance as a reflection of investor confidence in mid-sized NBFCs.
Conclusion
The Aye Finance IPO has so far received a cautious response from investors, achieving 16 per cent subscription by Day 2. While retail investors have shown steady interest, institutional demand remains moderate.
With Rs 1,010 crore at stake and a valuation of Rs 3,184 crore at the upper price band, the IPO represents an important step in the company’s expansion journey. Its focus on micro and small enterprises places it in a high-growth segment of India’s financial ecosystem.
However, final subscription figures and listing performance will ultimately determine how the market evaluates Aye Finance’s growth story. For now, the IPO reflects a balanced but cautious sentiment among investors in the NBFC space.
