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Aye Finance to Raise Up to $15 Million via Secured Non-Convertible Debentures
Mumbai‑listed Aye Finance Limited announced on 8 June 2026 that it will issue senior, secured, listed non‑convertible debentures (NCDs) valued at up to the Indian rupee equivalent of $15 million. The plan, approved by the company’s Working Committee of the Asset and Liabilities Committee (WALCO), will see each NCD issued at a face value of ₹1 lakh and a five‑year maturity.
The coupon rate will be determined through currency or interest‑hedging agreements with investors. Interest will be paid semi‑annually on the last day of each coupon period, while the principal will be repaid in five equal instalments beginning 18 months after allotment. The repayment schedule will be governed by a debenture trust deed executed between Aye Finance and a trustee. If the company defaults on coupon or redemption dates, or if an uncured default event occurs, a default interest of 2 % per annum above the agreed coupon will apply. To secure the debentures, Aye Finance will pledge loan assets and receivables under a first‑ranking exclusive charge in favour of the trustee, and it has committed to maintaining the pledged assets at a value of at least 1.1 times the outstanding debenture amount until full redemption.
The NCD issue follows the company’s February 2026 initial public offering (IPO), which raised ₹710 crore in fresh equity and ₹300 crore through an offer‑for‑sale. Shares debuted at ₹129 on the BSE and NSE, and the fresh proceeds were earmarked to meet capital requirements and strengthen the firm’s Tier I capital base. Aye Finance’s core business remains the provision of small‑ticket hypothecation loans—averaging ₹1.5 lakh—and mortgage‑based loans—averaging ₹5 lakh—to businesses across India. At the end of FY26, the company reported assets under management of ₹7,044 crore. In the fourth quarter of FY26, net profit rose 111 % year‑on‑year to ₹85.9 crore, while operating revenue increased 29 % to ₹528.4 crore. For the full fiscal year, profit after tax grew 13 % to ₹193.6 crore from ₹171.3 crore, and operating revenue climbed 24 % to ₹1,814.7 crore.
Shares of Aye Finance fell 4.67 % to ₹140 on the BSE on the day the NCD plan was announced. The decision to raise capital through secured NCDs rather than additional equity reflects the company’s intent to preserve ownership dilution while accessing a sizable pool of institutional investors. The secured nature of the debentures and the requirement to maintain a 1.1‑times asset‑to‑debt ratio provide investors with a safety cushion that aligns with the risk profile of non‑bank financial companies that rely on loan portfolios. This move is part of a broader trend among Indian NBFCs, which routinely use NCDs to raise capital and meet regulatory requirements.
With the planned NCD issuance, Aye Finance positions itself to expand its loan book and deepen its presence in the MSME market. Investors will now watch the next key dates: the finalisation of the debenture trust deed, the allotment of the NCDs, and the commencement of the first redemption instalment 18 months after allotment. The company has not yet disclosed the coupon rate or the exact timing of the NCD allotment, so market observers will rely on forthcoming investor presentations and regulatory filings for further details.
In summary, Aye Finance is set to raise up to $15 million through secured NCDs with a five‑year maturity and a structured redemption schedule. The move follows a successful IPO and strong FY26 earnings, and it is intended to bolster the company’s capital base while providing investors with a secured debt instrument.
The coupon rate will be determined through currency or interest‑hedging agreements with investors. Interest will be paid semi‑annually on the last day of each coupon period, while the principal will be repaid in five equal instalments beginning 18 months after allotment. The repayment schedule will be governed by a debenture trust deed executed between Aye Finance and a trustee. If the company defaults on coupon or redemption dates, or if an uncured default event occurs, a default interest of 2 % per annum above the agreed coupon will apply. To secure the debentures, Aye Finance will pledge loan assets and receivables under a first‑ranking exclusive charge in favour of the trustee, and it has committed to maintaining the pledged assets at a value of at least 1.1 times the outstanding debenture amount until full redemption.
The NCD issue follows the company’s February 2026 initial public offering (IPO), which raised ₹710 crore in fresh equity and ₹300 crore through an offer‑for‑sale. Shares debuted at ₹129 on the BSE and NSE, and the fresh proceeds were earmarked to meet capital requirements and strengthen the firm’s Tier I capital base. Aye Finance’s core business remains the provision of small‑ticket hypothecation loans—averaging ₹1.5 lakh—and mortgage‑based loans—averaging ₹5 lakh—to businesses across India. At the end of FY26, the company reported assets under management of ₹7,044 crore. In the fourth quarter of FY26, net profit rose 111 % year‑on‑year to ₹85.9 crore, while operating revenue increased 29 % to ₹528.4 crore. For the full fiscal year, profit after tax grew 13 % to ₹193.6 crore from ₹171.3 crore, and operating revenue climbed 24 % to ₹1,814.7 crore.
Shares of Aye Finance fell 4.67 % to ₹140 on the BSE on the day the NCD plan was announced. The decision to raise capital through secured NCDs rather than additional equity reflects the company’s intent to preserve ownership dilution while accessing a sizable pool of institutional investors. The secured nature of the debentures and the requirement to maintain a 1.1‑times asset‑to‑debt ratio provide investors with a safety cushion that aligns with the risk profile of non‑bank financial companies that rely on loan portfolios. This move is part of a broader trend among Indian NBFCs, which routinely use NCDs to raise capital and meet regulatory requirements.
With the planned NCD issuance, Aye Finance positions itself to expand its loan book and deepen its presence in the MSME market. Investors will now watch the next key dates: the finalisation of the debenture trust deed, the allotment of the NCDs, and the commencement of the first redemption instalment 18 months after allotment. The company has not yet disclosed the coupon rate or the exact timing of the NCD allotment, so market observers will rely on forthcoming investor presentations and regulatory filings for further details.
In summary, Aye Finance is set to raise up to $15 million through secured NCDs with a five‑year maturity and a structured redemption schedule. The move follows a successful IPO and strong FY26 earnings, and it is intended to bolster the company’s capital base while providing investors with a secured debt instrument.
