Aye Finance share price: Shares of small-cap non-banking financial company (NBFC) Aye Finance witnessed healthy buying interest in intraday trade on Tuesday, 19 May, as brokerage firm IIFL Capital initiated coverage on the stock with a 'buy' rating.
Aye Finance shares opened at ₹130.05 against their previous close of ₹128.20 and rose as much as 4.7% to an intraday high of ₹134.25. Around 11:10 am, the small-cap NBFC stock was 4.41% up at ₹133.85, looking set to extend gains for the second consecutive session. In the previous session, the stock rose 2.3%.
IIFL Capital says buy
Domestic brokerage firm IIFL Capital has initiated coverage on the stock with a buy recommendation, pegging the target price to ₹180, implying a 40% upside potential.
"Aye trades at similar multiples to MFI peers and 30-50% discount to MSME peers, despite a more secured book and superior AQ outcomes versus MFIs and comparable returns trajectory versus MSME peers," said IIFL.
IIFL highlighted that Aye currently trades at FY28 PB and PE of 0.9 times and 7 times, respectively, which, according to the brokerage firm, does not fully reflect its improving return profile.
IIFL expects 27% and 44% AUM and PAT CAGR, respectively, over FY26-29 and initiated coverage with a buy, implying FY28 PB and PE of 1.4 times and 10 times, respectively, for ROA and ROE of 4.1% and 14.5%, respectively, and 3-year EPS CAGR of 34%.
IIFL underscored that Aye Finance is a middle-layer NBFC lending to underpenetrated micro-MSMEs with assets under management (AUM) of ₹7,000 crore and a granular ticket size of ₹2 lakh.
IIFL said Aye Finance is geographically well diversified, with top 5 states contributing 57% of AUM versus 67-97% for peers, supported by 100% in-house sourcing and cluster-based underwriting designed to address the informal nature of the segment.
Aye Finance share price trend
The small-cap stock has been witnessing healthy buying interest recently after listing on 16 February this year.
Over the last month, the stock has gained 13% compared to a 4% fall in the Sensex.
Aye Finance shares hit their record high of ₹161.50 on 11 May after hitting a record low of ₹88.40 on 2 April this year.
The current market capitalisation of the stock is around ₹3,300 crore. In India, stocks with a market capitalisation below ₹5,000 crore are considered small-cap stocks.
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
