Latest news with #AyeFinance
Mint
27-05-2025
- Business
- Mint
Why two NBFCs are requesting easing of bond covenants
Two non-bank financiers lending to small businesses have separately approached their bondholders, seeking relaxations on covenants that were part of their original agreements to raise funds. Ugro Capital and Aye Finance raised bonds worth ₹49.28 crore and ₹50 crore, in 2022 and 2024, respectively. The lenders have now requested bondholders to waive certain covenants, and the respective bond trustees have conveyed them to the investors. In finance, covenants are part of agreements that prescribe certain dos and don'ts for issuers of these debt securities. A breach allows bondholders to seek additional interest, among other things. Also Read | Aye Finance, Bluestone Jewellery and GK Energy get SEBI nod to launch IPOs While Ugro Capital has breached its covenant around maintenance of capital to risk weighted assets ratio (CRAR) or capital adequacy ratio, Aye Finance believes it could breach the ceiling on stressed assets. Mint has seen a screenshot of the email detailing Ugro's request, and the text of the email sent on Aye Finance's request. Ugro has assets under management of ₹12,003 core as on 31 March, whereas Aye Finance has assets of ₹4,975 crore as on 30 September (latest available). IDBI Trusteeship Services informed holders of Ugro's bonds maturing in September 2025 that the lender has breached the covenant that it has to maintain a capital adequacy of 20%. In the March quarter, that dropped to 19.41%. Also Read | Stock market gets a warning from bonds and the dollar. Tariff turmoil isn't over 'Request of the company for relaxation of the covenant is presently under process," it wrote to bondholders in an email titled 'Notice for breach of covenants and intimation of the meeting of debenture holders. Ugro informed IDBI Trusteeship on 8 May that Reserve Bank of India (RBI) mandates non-bank lenders to maintain a capital adequacy of at least 15% and the company's capital levels were higher, at 19.41%. 'However, it is just marginally below the contractually agreed CRAR of 20%. As such, CRAR of 19.41% demonstrates a sound capital base and financial health of the company," it said in a statement available on the website of IDBI Trusteeship. Also Read | Indian equities, bonds, currency show resilience amid Trump's tariff tantrum 'We would like to state that in September 2022 when (the) debentures…were issued, the company was in its growth phase and it had agreed to high CRAR of 20%. You are requested to note that for most of the subsequent public as well as private NCD issuances of the company, the company has agreed to a covenant to maintain CRAR of 15% only i.e. minimum CRAR stipulated by RBI," it said. A spokesperson for the lender said in an emailed statement that the company has total borrowing of ₹6,900 crore as of 31 March. 'The bonds referred (to) by you are old bonds with small outstanding of ₹49.28 crore, as per the terms of trust deed, Ugro has requested for the capital adequacy covenant to be relaxed for which the trustee has written to bondholders," the spokesperson said. On 20 May, Ugro said it will raise up to ₹1,315 crore, in a mix of preferential issue of shares and a rights issue. The spokesperson said the proposed capital injection would increase its capital adequacy from 19.4% at present to 29.4%. Meanwhile, Aye Finance—backed by Elevation Capital and Capital G—has preemptively asked for a relaxation. In December, it filed its draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) to raise ₹1,450 crore in an initial public offering (IPO). As per the bond agreement, Aye Finance is supposed to contain its gross bad loans and write-offs during the past 12 months as a percentage of its total loan book at 8%. According to an email by Catalyst Trusteeship Ltd to bondholders on 15 April, Aye Finance believes that while the ratio mentioned above stands at 6.82% in December, it could exceed the 8% cap in the coming quarter. This is on account of 'increase in write-offs resulting from overall economic/business cycle". "In December 2024, we had proactively advised Catalyst's trusteeship on appx (approximately) 4% of our borrowings through NCDs under their trusteeship, of possibly exceeding the covenanted delinquency ratio," Krishan Gopal, chief financial officer, Aye Finance said in response to an emailed query. 'This reflects our commitment to protect the investments of our bondholders irrespective of the amount invested. Such events are not uncommon in the financial industry," said Gopal, adding that the lender has had no recall of any loan or borrowing on account of breach of covenant, and the company continues to maintain good liquidity positions. He said the company is witnessing a reduction in business stress, and expects normal business conditions as it progresses through this year. Experts said that stress in certain asset classes was leading to covenant breaches among bond issuers. 'Over the past couple of quarters, due to stress in certain asset classes like microfinance, MSME finance, we have seen covenants getting breached for a few issuers, especially those with respect to asset quality," said Anshul Gupta, co-founder of online bond platform Wint Wealth. However, Gupta said that a covenant breach does not necessarily mean that an entity is under significant stress or default is imminent, and investors should assess how significant the breach is and what is the impact on the entity's repayment capabilities. 'If the entity's repayment capabilities aren't impacted, generally, waivers are given. Trustees acting on majority investor directions can either waive or enforce the covenants," said Gupta.
Business Standard
22-05-2025
- Business
- Business Standard
Aye Finance standalone net profit rises 14.13% in the March 2025 quarter
Sales rise 34.24% to Rs 409.14 crore Net profit of Aye Finance rose 14.13% to Rs 40.70 crore in the quarter ended March 2025 as against Rs 35.66 crore during the previous quarter ended March 2024. Sales rose 34.24% to Rs 409.14 crore in the quarter ended March 2025 as against Rs 304.78 crore during the previous quarter ended March 2024. For the full year,net profit rose 6.29% to Rs 171.27 crore in the year ended March 2025 as against Rs 161.13 crore during the previous year ended March 2024. Sales rose 40.33% to Rs 1459.73 crore in the year ended March 2025 as against Rs 1040.22 crore during the previous year ended March 2024. Particulars Quarter Ended Year Ended Mar. 2025 Mar. 2024 % Var. Mar. 2025 Mar. 2024 % Var. Sales 409.14304.78 34 1459.731040.22 40 OPM % 41.3744.53 - 45.8951.66 - PBDT 56.7757.73 -2 247.17242.40 2 PBT 50.4553.43 -6 225.01227.86 -1 NP 40.7035.66 14 171.27161.13 6
Yahoo
05-02-2025
- Business
- Yahoo
Aye Finance partners with Credgenics for digital transformation in debt collection
The engagement will leverage advanced digital capabilities across the collections lifecycle to make the processes future-ready NEW DELHI, Feb. 5, 2025 /PRNewswire/ -- Aye Finance, one of the leading NBFCs providing business loans to the largely underserved micro-scale enterprises in India has joined hands with Credgenics, an AI-powered platform for debt collections and resolutions. This engagement will digitally transform Aye Finance's debt collections and resolution processes by deploying Credgenics' advanced technology platform. Aye Finance has been at the forefront of providing affordable credit to the small business community that has broadly remained out of the formal credit ecosystem, by following a credit assessment approach and extensive use of technology across lending processes. Credgenics SaaS based platform at Aye Finance will enable an integrated, personalized and insights-driven communications strategy with borrowers across various channels. These advanced capabilities will further enhance operational effectiveness through the deployment of tailored collections strategies. The CG Collect field app will not only empower the field collectors to manage their day-to-day activities more efficiently but also will enable borrowers to make instant digital repayments. Bilzy Payments solution will enable the Aye Finance team to generate personalized payment links that can be embedded in customer communications to facilitate secure digital transactions. Credgenics Litigation Management System will help the legal collections team at Aye Finance to monitor, action and report on legal proceedings, ensuring complete visibility into the status and performance. With Credgenics Settlement Portfolio Management solution, Aye Finance would be able to streamline their end-to-end debt settlement process. Commenting on the partnership, Jinu Joseph, Chief Technology Officer, Aye Finance stated, "We at Aye Finance are committed to using innovative practices and high-tech digital capabilities to provide customer-centric financial services in an efficient, cost-effective and scalable manner. We believe that our partnership with Credgenics will help us further this strategy and make our debt recovery processes more data-oriented, insightful and efficient. We believe that the technology partnership with Credgenics will help our field teams optimize and enhance their engagement with our customers by utilizing their integrated, multi-channel digital capabilities." Rishabh Goel, Co-Founder and CEO of Credgenics, added, "Aye Finance has firmly established itself as a leading micro-business lender to businesses that have traditionally remained outside the reach of formal credit. Their focus on using technology-backed innovation in credit underwriting and collections to make micro-business loans affordable and viable is highly appreciated across the industry. Our solutions will enable Aye Finance to manage recoveries with unprecedented efficiency, and agility. We believe that this collaboration will set new benchmarks in the industry while transforming debt recovery practices for the digital world." Credgenics' technology combined with Aye Finance's commitment to supporting small businesses, is set to further transform the MSME lending landscape, driving sustainable growth and encouraging financial inclusivity. About Credgenics Credgenics is the leading provider of Loan Collections and Debt Resolution technology platforms to Banks, Non-banking finance companies, FinTechs, and ARCs worldwide. The AI-powered SaaS-based platform has been recognized as the #1 Best Selling Loan Collections Platform in India by IBS Intelligence in their Annual Sales League Table for three years consecutively. Credgenics caters to the end-to-end collection lifecycle for retail and SME / MSME debt and works with over 150 customers. It handled more than 98 million retail loan accounts worth over USD 250 Billion in FY24 for collections and has sent over 1 billion omnichannel communications. With Credgenics, lenders have increased resolution rates by 20%, improved collections by 25%, reduced collections costs by 40%, reduced collections time by 30%, and improved legal process efficiencies by 60%. About Aye Finance Aye Finance Limited (formerly known as Aye Finance Private Limited) is a non-banking financial company focused on providing loans to micro-scale MSMEs across India for their working capital and business expansion needs. Aye offers small-ticket business loans to customers across manufacturing, trading, service and allied agriculture sectors. Our product offerings comprise mortgage loans, 'Saral' Property Loans, secured hypothecation loans and unsecured hypothecation loans. Aye Finance is headquartered in Gurgaon and has a branch presence in 18 states & 3 UTs through over 499 offices. The company which is a decade old, has partnered with marquee investors which includes CapitalG, British International Investment, ABC Impact, Elevation Capital, Lightrock, Alpha Wave, A91 Partners and MAJ Invest. Photo: View original content to download multimedia:
