Aye Finance IPO Ahead: Profit Falls 26% YoY, But Revenue Surges 22%! See Key Financials & IPO Plans!

Aye Finance, a Non-Banking Financial Company (NBFC) planning its Initial Public Offering (IPO), has released its financial results for the second quarter of FY26. The company's net profit saw a significant decrease of almost 26% year-on-year, falling to INR 34.5 crore from INR 46.9 crore in the same period last year. However, on a sequential basis, net profit showed a healthy increase of 12% from INR 30.9 crore in the June quarter.

Operating revenue for the quarter grew by over 22% year-on-year to INR 436.6 crore, and by 7% quarter-on-quarter. Including other income, the total income reached INR 446.9 crore. Interest income remains the primary revenue driver, contributing approximately 85% of the operating revenue.

Aye Finance has received approval from the Securities and Exchange Board of India (SEBI) for its IPO, which will comprise a fresh issue of shares worth INR 885 crore and an offer for sale (OFS) of INR 565 crore, totaling INR 1450 crore. The funds raised from the fresh issue will be used to meet future capital requirements for business expansion. Existing investors like LGT Capital and CapitalG are among those participating in the OFS.

The company's total expenditure increased by 33% year-on-year to INR 405.2 crore. Key expense drivers include a 9% rise in finance costs (interest on borrowings), a 32% jump in employee benefits cost, and a sharp 63% increase in impairment loss on financial instruments, which stood at INR 86.2 crore.

Impact: This news presents a mixed picture for potential investors in Aye Finance's upcoming IPO. While the revenue growth and the company's expansion plans are positive, the year-on-year decline in net profit and the significant increase in impairment losses raise concerns about profitability and asset quality. The market will closely watch investor sentiment towards the IPO, balancing the growth story against these financial headwinds. Rating: 6/10

Difficult Terms: * **Net Profit**: The profit a company makes after deducting all expenses, taxes, and interest from its total revenue. * **Operating Revenue**: The income generated from a company's primary business activities. * **IPO (Initial Public Offering)**: The process by which a private company offers its shares to the public for the first time, allowing it to be listed on a stock exchange. * **NBFC (Non-Banking Financial Company)**: A financial institution that provides banking-like services but does not hold a full banking license. They typically offer loans, credit facilities, and investment options. * **SEBI (Securities and Exchange Board of India)**: The regulatory body responsible for overseeing and regulating India's securities market. * **DRHP (Draft Red Herring Prospectus)**: A preliminary registration document filed with the securities regulator before an IPO, containing detailed information about the company and the proposed offering. * **RHP (Red Herring Prospectus)**: The final prospectus filed with the registrar of companies before an IPO, after receiving regulatory approval, which contains all necessary information for potential investors. * **OFS (Offer for Sale)**: A component of an IPO where existing shareholders sell a portion of their stake to the public, rather than the company issuing new shares. * **Fresh Issue**: When a company issues new shares to raise capital through an IPO. * **Interest Income**: Income earned from lending money or holding interest-bearing assets. * **Finance Cost**: The cost incurred by a company for borrowing money, primarily interest payments on loans. * **Employee Benefits Cost**: Expenses related to employee compensation, including salaries, wages, bonuses, and other benefits. * **Impairment Loss**: A reduction in the carrying value of an asset on a company's balance sheet when its recoverable amount is less than its book value. For NBFCs, this often relates to loans that are unlikely to be repaid. * **Q2 FY26**: The second quarter of the Financial Year 2025-2026, typically covering the period from July 1 to September 30, 2025. * **YoY (Year-over-Year)**: A comparison of a metric from the current period to the same period in the previous year. * **QoQ (Quarter-over-Quarter)**: A comparison of a metric from the current quarter to the immediately preceding quarter.