Banking News

Aye Finance to raise Rs 310 crore in equity from British investor and others


KOLKATA: CapitalG-backed Aye Finance has finalised a plan to raise Rs 310 crore by selling shares to British International Investment, Waterfield Advisors and A91 Partners, as the non-bank lender is looking to scale up operations.

The company has entered into definitive agreements for the equity transaction with these investors.

British International Investment will put in Rs 250 crore for an around 9% stake in the company. Waterfield, an independent multi-family office, will invest Rs 15 crore, while existing shareholder A91 Partners will infuse Rs 35 crore.

This is Aye Finance’s first equity expansion in two years and first on-boarding of new investors since Covid, managing director Sanjay Sharma told ET.

In 2021, it raised Rs 210 crore from existing investors such as CapitalG, A91 and Lightrock.

“The money will be used to expand the branch network and for sourcing new businesses. There is immense potential in lending to underserved microenterprises and the fresh capital will provide a strong fillip to our compounding story,” Sharma said.Venture capital firm Elevation Capital is the largest shareholder in the nine-year old lender. It will have an 18% interest after this round of equity infusion, while CapitalG and Lightrock will have an around 14% stake each.Aye Finance, which started operations in 2014 from Gurgaon, provides working capital to unorganised micro enterprises such as manufacturing units, restaurants and beauty parlours with average loan ticket of Rs 1.25 lakh.

The company has over Rs 3,600 crore of assets under management and posted Rs 80 crore of net profit in the first six months of the ongoing fiscal 2024.

“There are over 64 million MSMEs in India and only 11% of micro enterprises have access to formal credit. Through partnering with Aye, we are not only helping to bridge this gap but also enabling micro entrepreneurs and their employees to grow their businesses and incomes,” said Gaurav Malhotra, director for financial services at British International Investment.


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