Fintech co Aye Finance aims to raise up to Rs 400 cr equity

Aye Finance Rs. 400 cr fun raising

Kolkata: Fintech lender Aye Finance is planning to raise Rs 350-400 crore equity as part of its business growth strategy for the next two years. This will be the first equity expansion by the company after the Covid-19 pandemic, chief executive Sanjay Sharma said.

Just before the pandemic, it had raised Rs 210 crore.

“Our current capital is adequate for this year’s business growth. We are planning this equity expansion for our next growth cycle,” Sharma told ET in an interview.

The company, which primarily provides short-term working loans to micro small and medium enterprises, is targeting to raise the equity by the end of March 2022.

“It’s always better to raise capital six months before the requirement,” Sharma said.

It has a net worth of Rs 750 crore while its gross loan portfolio was at Rs 1450 at the end of June. leaving enough headroom for growth with the current level of capital. By the end of FY22, it aims to have a portfolio of Rs 2200-2300 crore.

The CEO, who is also the co-founder of the seven-year young firm, said while existing investors of Aye Finance are likely to invest in the fresh round of capital infusion, the management would prefer to bring in at least one new investor to diversify the pool.

Denmark’s Maj Invest, venture capital firm Elevation Capital, alternative asset manager Falcon Edge Capital, CapitalG (formerly Google Capital), Light rock, and A91 Partners are its investors.

“We are beginning to see green shoots. The market has shown a lot more resilience,” Sharma said on the business prospect.

The lender’s gross non-performing assets ratio jumped to 5.9 percent as on June 30 from 3.3 percent three months back, as a result of the stress and disruptions created by the pandemic.

Sharma said that collection efficiency improved to over 90 percent in August from the lows in April and May giving stability in cash flows. “We are in the financial inclusion space and there is no problem with the intent of our borrowers,” he said

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