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IPO-bound NBFC Aye Finance’s net profit declined 40% to INR 64.3 Cr in the first half of the current financial year (H1 FY26) from INR 106.9 Cr in H1 FY25, as margin narrowed and defaults increased.
The company’s operating revenue grew 21.8% to INR 843.5 Cr during the period under review from INR 692.24 Cr in H1 FY25. Including other income of INR 19.5 Cr, the NBFC’s total income stood at INR 863 Cr as against INR 717 Cr in H1 FY25.
A bulk of Aye Finance’s income for the period came from interest collected from loans and deposits, making up for 87% of its total operating revenue. Interest income for the period stood at INR 733.8 Cr, up 14.6% from INR 640 Cr in H1 FY25. Out of this, INR 720.7 Cr was interest collected on loans disbursed to customers.
Additionally, the NBFC earned INR 32.6 Cr from fee and commissions, up 30.72% from INR 25 Cr collected during the same period last year.
Meanwhile, net interest margin contracted to 14.12% in H1 FY26 from 15.38% in the year-ago period.
Aye Finance, which provides credit to MSMEs, disbursed loans worth INR 2,316 Cr during H1 FY26, up 15% YoY. Of this, repeat loans made up for over half, and the NBFC claimed to have a retention rate of 41%. The average ticket size for loans was at INR 1.8 Lakh, while those for repeat loans was slightly higher at INR 2.2 Lakh.
The company’s total assets under management stood at INR 6,027.6 Cr as of September 2025, growing 21% YoY. Average AUM per branch was at INR 10.6 Cr. The NBFC has 568 branches across 21 states and union territories in the country.
In terms of lending mix, secured loans stood at 42%, unsecured loans at almost 41%, mortgage-backed loans at 15.7%, and 1.18% were Saral Property Loans, which are backed by properties with disputed or imperfect titles.
Default rate grew to 38.52% during the period under review from 33.85% in the first half of the previous fiscal. At the same time, its collection efficiency fell to 89.72% from 92.38% during the same period. Gross NPA surged to 4.85% from 3.32% in the year-ago period, while net NPA rose to 1.78% in H1 FY26 from 1.15%.
The Gurugram-based NBFC filed its red herring prospectus (RHP) with the Securities and Exchange Board (SEBI) earlier this week for INR 1,010 Cr IPO. The fresh issue size has been cut 19.7% from the DRHP to INR 710 Cr, while the offer-for-sale (OFS) component has been trimmed to INR 300 Cr.
The price band for the public issue has been set at INR 122 to INR 129, valuing Aye Finance at INR 3,183 Cr ($352 Mn) at the upper end.
Breaking Down Aye Finance’s Expenses
The NBFC’s expenses shot up 36.2% to INR 780.4 Cr in H1 FY26 from INR 573 Cr in the corresponding period of last fiscal year, as write-offs and impairment expenses surged.
Finance Cost: The cost of securing capital for its loan disbursal operations continue to be the biggest expense head for Aye Finance at INR 258.9 Cr, rising marginally by 12.91% from INR 229.3 Cr.
Employee Benefit Expenses: The spending under this head zoomed over 36% to INR 236.6 Cr from INR 173.9 Cr in the year-ago period.
Impairment On Financial Instruments: Aye Finance’s impairment costs shot up 70.5% during the period under review to INR 172 Cr from INR 101.4 Cr in the previous fiscal year. Of this, the NBFC wrote-off loans worth INR 146 Cr, up 91.3% from INR 76.4 Cr.
The post IPO-Bound NBFC Aye Finance’s Profit Dips 40% To INR 64 Cr In H1 FY26 appeared first on Inc42 Media.
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