Aye Finance, backed by CapitalG, has solidified plans to raise Rs 310 crore through a share sale to British International Investment, Waterfield Advisors, and A91 Partners, aiming to scale up its operations. The non-bank lender has entered definitive agreements for this equity transaction.
British International Investment is set to invest Rs 250 crore for an approximately 10% stake in the company. Waterfield Advisors, an independent multi-family office, will contribute Rs 35 crore, while existing shareholder A91 Partners plans to infuse Rs 25 crore.
This marks Aye Finance’s first equity expansion in two years and its first onboarding of new investors since the onset of the Covid pandemic. In 2021, the company raised Rs 210 crore from existing investors, including CapitalG, A91, and Lightrock.
Sanjay Sharma, Managing Director of Aye Finance, highlighted that the funds will be utilized to expand the branch network and source new businesses. The company, which began operations in 2014 from Gurgaon, focuses on providing working capital to unorganized micro-enterprises such as manufacturing units, restaurants, and beauty parlors, with an average loan ticket of Rs 1.25 lakh.
With over Rs 3,600 crore in assets under management, Aye Finance reported a net profit of Rs 80 crore in the first six months of the ongoing fiscal year 2024.
Elevation Capital is the largest shareholder in the nine-year-old lender, holding a 16% interest after this round of equity infusion. CapitalG and Lightrock will each have around a 14% stake.
Gaurav Malhotra, Director for Financial Services at British International Investment, emphasized the significance of the partnership, stating, “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.”
