Aye Finance, a new-age non-banking finance company, plans to raise capital of about $40–50 million in a Series F round in January–March 2022 to fund business growth, Sanjay Sharma, MD&CEO has said.

This CapitalG (Google parent Alphabet’s investment arm) backed fintech had, in April last year, raised ₹210 crore in its Series E equity round. This funding round was led by CapitalG. With that raise, the net worth of the company, which is focused on lending to micro enterprises, reached ₹750 crore from ₹500 crore.

“Since markets are now good, we will look at raising some equity money this fiscal and probably in the Jan-February period in second half,” Sharma said.

No public fund raise

He, however, ruled out tapping the public markets to raise capital in January-March 2022. “Every capital raise, we had brought in an additional new investor besides existing ones. Even this time, we will look to bring an additional new investor and existing investors are expected to participate,” he said.

Sharma noted that any capital raise of $40-50 million will help Aye Finance meet its requirements for the next two years.

“Hopefully, our loan book will grow to ₹5,000 crore by then”, he said.

Robust business

He highlighted that business operations of Aye Finance have now returned to pre-pandemic levels and business is now humming. The markets are responding and people now want to get on with their lives. This is very apparent in the Tier 2 and Tier 3 towns, where Aye Finance has several branches.

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“We have started disbursing more than ₹100 crore each month since August 2021 — the same level as August 2019. By October, we expect ₹170 crore lending as our monthly run rate. We also hope to bounce back in Return on Assets to more than 2.5 per cent this fiscal from 1.5 per cent last fiscal. Actually, Covid had robbed us of 3 percentage in RoA as we were eyeing RoA of 4–4.5 per cent in 2020-21”, Sharma said.

Sharma also expects Aye Finance lending portfolio to grow from ₹1,400 crore to ₹2,400 crore this fiscal.

The bottom-line aspiration for the current fiscal is more than ₹50 crore, higher than the net profit of ₹15 crore recorded last fiscal, Sharma said. In 2019-20, Aye Finance had recorded net profit of ₹ 47 crore.