Arka Fincap Limited, a non-banking financial company (NBFC) promoted by the Kirloskar Group, has raised an initial investment of Rs 525 crore from The Rise Funds, the impact investing platform of TPG.
The company plans to use the capital for expansion, investments in technology and strengthening its risk management capabilities. These are the three priorities it has outlined for the money.
Arka Fincap was founded in 2018. The NBFC is therefore a relatively young lender, and it is backed by an established Indian industrial group. The Rise Funds' commitment adds a global private equity investor to its shareholder base.
The Rs 525 crore is described as an initial investment. Details such as the valuation, the stake The Rise Funds will hold and the structure of any further commitment were not immediately available.
For NBFCs, fresh equity typically supports balance sheet growth, since it lets lenders take on more lending while staying within capital adequacy requirements. Spending on technology and risk management points to a focus on the systems that underpin credit decisions and portfolio monitoring as the business scales.
The deal is another example of global investors putting money into Indian non-bank lenders that have corporate group backing.
