Aye Finance IPO

Here's my take on Aye Finance's upcoming IPO. This MSME-focused NBFC, helmed by Govinda and Sanjay Sharma, is setting out to raise ₹1,010 crore between February 9-11, 2026, with shares priced at ₹122-129. While they’ve shown impressive revenue growth, a glaring red flag is their annual impairment losses, which gobble up a staggering 20% of revenue – far higher than peers like SBFC Finance or Five Star Business Finance. This points to significant challenges in loan recovery. Operationally, their finance costs are high, and combined with employee expenses, they're left with a thin 7% net margin. A worrying 65% employee attrition rate further suggests a high-pressure environment. The valuation, with a PE of around 25, seems stretched when compared to more efficient players. Given the severe loan quality issues, weak cost management, and a rich valuation, Aye Finance appears to offer limited fundamental value. Any potential listing gains would likely be purely speculative, banking on an exceptionally bullish market, rather than solid long-term prospects.