Aye Finance Reports Strong FY26 Growth and Key Financials

Aye Finance reported strong results for FY26, with Assets Under Management (AUM) reaching ₹7,044 crore, a significant 27% year-on-year growth. Disbursements also saw an increase of 20% to ₹5,169 crore, reflecting strong demand in the micro-enterprise lending segment.

Key Financial Highlights

Aye Finance Ltd. announced its provisional business performance for the fiscal year ending March 31, 2026. The non-banking financial company (NBFC) posted a substantial 27% year-on-year increase in its Assets Under Management (AUM) to ₹7,044 crore.

Total disbursements for the fiscal year grew by 20% to ₹5,169 crore, reflecting healthy credit demand from its target micro-enterprise segment.

Key asset quality metrics were reported, with Gross Non-Performing Assets (GNPA) at 4.77% for Q4 FY26 and a 1-90 Day Past Due (DPD) ratio of 1.87% as of March 2026. Collection efficiency was a strong point, with Non-Overdue (Non-OD) accounts achieving 99.5% efficiency.

What This Means for Investors

These results come shortly after Aye Finance's IPO in February 2026, offering insights into its post-listing financial health and growth trajectory. The reported growth in AUM and disbursements suggests sustained demand for micro-enterprise credit, a segment Aye Finance specializes in. Strong asset quality metrics are crucial for profitability and investor confidence.

About Aye Finance

Aye Finance, founded in 2014, focuses on lending to underserved micro and small businesses in India, often referred to as the 'missing middle'. The company uses a proprietary cluster-based underwriting model, supported by data science and technology, to assess cash flows of businesses without formal financial documentation. It completed its Initial Public Offering (IPO) in February 2026, raising ₹1,010 crore, with shares listing on February 16, 2026. Prior to this, the company had achieved a significant AUM CAGR of 42.6% between FY23 and FY25. Aye Finance also attracted strategic funding, including a ₹310 crore ($37 million) Series F round in December 2023 led by British International Investment (BII).

Outlook for Shareholders

For shareholders, the strong provisional results suggest a positive start to FY26 post-IPO, supporting its growth story. The focus on technology and data-driven underwriting positions the company for ongoing efficiency. Expansion plans into reaching more micro-enterprises show a commitment to scaling the business.

Risks to Watch

Gross Non-Performing Assets (GNPA) have been a point of concern, rising from 2.49% in FY23 to 4.85% by September 2025. While the reported FY26 GNPA of 4.77% shows a slight improvement from the Sep 2025 figure, it remains higher than some peers. The company faces challenges with its loan book, including a significant portion of unsecured loans and a reliance on hypothecation loans, which have historically shown higher delinquency. Aye Finance was also fined ₹1.49 lakh by BSE for delayed financial disclosures in March 2026, noting compliance pressures. Furthermore, it faced breaches of financial covenants in listed NCDs related to GNPA and write-off ratios.

Peer Comparison

Aye Finance's 27% AUM growth for FY26 is robust when compared to peers like AU Small Finance Bank (2.30% GNPA as of 9M FY26). However, its GNPA of 4.77% is higher than AU SFB and Bajaj Finance (~1.03%-1.21%), and comparable to Cholamandalam Investment and Finance (4.57%) and Shriram Finance (4.55%), though these peers manage much larger AUMs. The company's P/B multiple of 1.3x trades below peers like MAS Financial Services (2.05x).

Supporting Data

Aye Finance's AUM grew from ₹5,534 crore in FY25 to ₹7,044 crore in FY26. Gross NPAs were reported at 4.85% as of September 2025 and 4.21% for FY25. The Debt to Equity ratio was between 2.73x and 2.83x in FY25.

What to Track Next

Investors will closely monitor the sustained improvement in asset quality metrics, particularly GNPA and DPD, in the coming quarters. The company's ability to maintain its high collection efficiency amidst evolving economic conditions will be key. Track the impact of technological advancements and data science on underwriting and operational efficiency. Focus will remain on Aye Finance's strategy for steady and responsible growth in serving the micro-enterprise segment.