Aye Finance To Raise $15 Mn In Debt Funding
Aye Finance has approved a private placement of secured NCDs worth up to $15 million. The five-year instruments will be backed by pledged loan assets and receivables.
Intelligence analysis by GPT-5.4 Mini
Recently listed NBFC Aye Finance is tapping the debt market again, this time through secured, listed non-convertible debentures. The move comes soon after its IPO and is meant to add capital while keeping the borrowing structured against loan assets and receivables.
Aye Finance is borrowing money in a careful way, like taking a loan and promising a pile of its own loan payments as backup. It wants this money to help keep lending to small businesses across India.
Analysis
What Aye Finance approved
Aye Finance's WALCO has approved the offer and issuance of senior, secured, rated, listed, redeemable, transferable non-convertible debentures worth up to the Indian rupee equivalent of $15 million. The company plans to issue them on a private placement basis, with each debenture carrying a face value of ₹1 lakh.
The securities are set to be allotted on June 25 and will mature in five years. They will be listed on the BSE's Wholesale Debt Market Segment. The coupon rate will be worked out using currency or interest-hedging agreements with investors, according to the filing.
How the instrument is structured
The company said interest will be paid every six months, on the last day of each coupon period. Principal repayment will happen in five equal instalments starting 1.5 years after allotment. If the company misses coupon or redemption obligations, or if an uncured default event occurs, the unpaid amount will attract an extra 2% per year over the agreed coupon rate.
To secure the borrowing, Aye Finance will pledge loan assets and receivables. These, along with future receivables and related proceeds, will be placed under a first-ranking exclusive charge in favour of the debenture trustee. The company has also said the pledged assets will be maintained at at least 1.1x the outstanding debenture amount until full redemption.
Where this fits in the company’s funding story
The debt raise comes only months after Aye Finance's IPO, which had a fresh issue worth ₹710 crore and an offer-for-sale component worth ₹300 crore. The fresh proceeds were meant to support the company's capital needs and increase its Tier I capital base. The company debuted in February at the issue price of ₹129 on the BSE and NSE.
The article notes that NBFCs commonly use the NCD route to meet capital requirements. Aye Finance, which lends to MSMEs across India, offers small-ticket hypothecation loans with an average size of ₹1.5 lakh and mortgage-backed loans averaging ₹5 lakh.
On the operating side, the company says it had ₹7,044 crore in assets under management at the end of FY26. Its Q4 FY26 net profit rose 111% year over year to ₹85.9 crore, while operating revenue increased 29% to ₹528.4 crore. For FY26, PAT rose 13% to ₹193.6 crore and operating revenue increased 24% to ₹1,814.7 crore. The article also says Aye Finance's shares ended the trading session 4.67% lower at ₹140 on the BSE.
Key points
- Aye Finance approved secured non-convertible debentures worth up to the rupee equivalent of $15 million.
- The NCDs will be privately placed, carry a ₹1 lakh face value, and mature in five years.
- Interest is to be paid semi-annually, with principal repaid in five equal instalments starting 1.5 years after allotment.
- The issue is backed by pledged loan assets and receivables under a first-ranking exclusive charge.
- The debt raise follows Aye Finance's recent IPO and comes as the NBFC reports strong FY26 profit and revenue growth.
If the issuance goes smoothly, Aye Finance can raise fresh funds without straining its equity base. The extra capital could support more lending to MSMEs while the company keeps its borrowing backed by assets and receivables.
The company still has to meet coupon and redemption payments over five years, so any stress in collections could become costly. If asset values or receivables weaken, the security cushion could come under pressure despite the 1.1x coverage commitment.
