Aye Finance has been upgraded by ICRA to [ICRA]A+ with a Stable Outlook, marking its second major rating upgrade this financial year. This enhancement reflects improvements in the company’s capitalisation, asset quality, liquidity, and profitability. The upgraded rating is expected to broaden Aye Finance’s access to diversified and competitively priced funding sources, supporting its continued growth in the micro-enterprise lending sector.
Aye Finance Receives Major Rating Upgrade
Aye Finance Limited, a technology-driven lender focused on micro enterprises, has announced a significant upgrade in its credit rating by ICRA. The rating agency has revised Aye Finance’s rating to [ICRA]A+ from [ICRA]A, accompanied by a Stable Outlook. This upgrade follows a similar upgrade from India Ratings & Research in June 2026 and signifies the company’s robust performance amidst a challenging macroeconomic environment.
Key Drivers for the Upgrade
ICRA’s decision is underpinned by several key factors demonstrating Aye Finance’s strengthened financial position:
- Stronger Capitalisation: As of September 2026, the company reported a capital adequacy ratio of 41% and a net worth of INR 2695 Crore, with managed gearing at 2.4X. ICRA noted that this improved capitalisation will support Aye Finance’s planned operational expansion.
- Improved Asset Quality: The proportion of gross stage 3 assets has decreased to 4.2% as of September 30, 2026, down from 4.8% on March 31, 2026.
- Diversified Franchise: The Assets Under Management (AUM) reached INR 7,597 Crore by September 30, 2026, reflecting a 26% year-on-year increase. The AUM is spread across 571 districts in 21 states and union territories, indicating healthy geographical diversification.
- Adequate Liquidity: Aye Finance maintained unencumbered on-book liquidity of approximately INR1,260 Crore as of September 30, 2026.
- Higher Profitability: The company reported a profit after tax of approximately INR161 crore for the first half of FY27, an increase driven by lower credit costs and tighter operating expenses. The profit after tax for FY26 was INR 194 Crores.
Strategic Implications of the Upgrade
Mr. Sanjay Sharma, Managing Director of Aye Finance, commented on the upgrade, stating, “Our second rating upgrade in FY27 reflects a stronger balance sheet following our IPO, a measurable improvement in asset quality and a business that continues to scale across geographies without compromising on underwriting discipline. The A+ rating broadens our access to diversified, competitively priced funding from banks, debt capital markets and securitisation. This should lend further support to profitability as we enter the seasonally stronger part of the financial year.”
Aye Finance, an RBI-registered NBFC, serves India’s micro-enterprise sector. The company has seen substantial growth, with a 151% year-on-year increase in profit after tax and a 26% year-on-year growth in assets under management in Q2 FY27.
Source: BSE
