Kirloskar Group-backed non-banking financial company (NBFC) Arka Fincap’s investment agreement with global alternative asset management firm TPG involves an initial capital infusion of ₹525 crore, with the possibility of an additional ₹275 crore subject to specified business milestones and regulatory approvals.
The investment is being made through TPG’s The Rise Funds, its impact investing platform. According to Arka’s November 6 statement, the capital will support the company’s expansion in secured retail lending, strengthen its geographical presence and fund investments in technology and risk management capabilities.
What does the investment deal involve?
The agreement provides for an initial investment of ₹525 crore. TPG may invest another ₹275 crore through a subsequent tranche, subject to Arka achieving specified business milestones and obtaining the necessary regulatory approvals.
The company has not disclosed the proposed equity stake or valuation as part of the announcement.
Where will the funds be deployed?
Arka plans to use the growth capital to expand its secured retail lending businesses, deepen its geographical reach and strengthen its technology and risk management infrastructure.
The company currently offers pre-owned vehicle financing, secured business loans, loans against property and wholesale lending.
What is Arka Fincap’s current business size?
Arka has assets under management (AUM) of around ₹8,000 crore, of which its secured retail lending portfolio accounts for more than ₹1,000 crore.
The NBFC operates across 10 states through 146 branches and has a workforce of over 2,000 employees. It continues to operate its wholesale lending platform alongside its expanding retail business.
Who are the investors and promoters?
Arka Fincap is promoted by Kirloskar Oil Engines Limited, part of the Kirloskar Group. The company is registered with the Reserve Bank of India and carries a CRISIL AA/Stable rating.
TPG is a global alternative asset management firm with investments across private equity, impact investing, credit, real estate and other strategies. The investment in Arka is being made through The Rise Funds, which focuses on growth-stage companies across sectors including financial inclusion, healthcare, education and climate.
The transaction marks TPG’s investment in Arka’s next phase of expansion, with a focus on secured lending to small businesses, entrepreneurs and vehicle operators.