Rating Upgrade Details

ICRA Limited has upgraded Aye Finance Limited's credit rating from [ICRA]A to [ICRA]A+ with a Stable Outlook. This represents the company's second rating upgrade in FY2027, following India Ratings & Research's upgrade to A+ in June 2026.

Financial Metrics Supporting Upgrade

Capitalisation Strength:

  • Capital adequacy ratio: 41% as of September 2026
  • Net worth: INR 2,695 Crores as of September 2026
  • Managed gearing: 2.4X

Asset Quality Improvement:

  • Gross stage 3 assets: 4.2% as of September 30, 2026 (down from 4.8% as of March 31, 2026)

Profitability Metrics:

  • H1 FY27 profit after tax: ~INR 161 crore
  • FY26 profit after tax: INR 194 Crores
  • Credit costs: 3.6% of average managed assets (vs 4.3% in FY26)
  • Operating costs: 8.1% (vs 8.8% in FY26)

Business Scale and Diversification:

  • Assets under management (AUM): INR 7,597 Crore as of September 30, 2026
  • Year-on-year AUM growth: 26%
  • Geographical spread: 571 districts across 21 states and union territories
  • Top three states account for 43% of AUM
  • Top ten districts account for approximately 4% of AUM

Lidity Position:

  • Unencumbered on-book liquidity: Approximately INR 1,260 Crore as of September 30, 2026

Management Commentary

Mr. Sanjay Sharma, Managing Director of Aye Finance, stated that the rating upgrade reflects:

  • Stronger balance sheet following the company's IPO
  • Measurable improvement in asset quality
  • Business scaling across geographies without compromising underwriting discipline
  • The A+ rating broadens access to diversified, competitively priced funding from banks, debt capital markets, and securitization
  • Expected to support profitability as the company enters the seasonally stronger part of the financial year

Company Background

Aye Finance Limited is an RBI-registered NBFC focused on serving India's micro enterprise sector, estimated at approximately 60 million businesses. The company has been operating since 2014 and currently serves 7 lakh active customers through a pan-India presence across 18 states and 3 union territories.

Recent Performance

In Q2 FY27, Aye Finance reported:

  • 151% year-on-year increase in profit after tax
  • 26% year-on-year growth in assets under management to INR 7,597 crore