Kirloskar-backed NBFC Arka gets ₹525 cr initial commitment from TPG’s Rise Funds

Priyamvada C

Mumbai: Arka Fincap Ltd, a Kirloskar Group-promoted NBFC, has signed definitive agreements with The Rise Funds, TPG’s global impact investing platform, for an initial investment of ₹525 crore, the company said in a statement on Saturday.

The investment could increase by another ₹275 crore, subject to Arka meeting specified business milestones and obtaining regulatory approvals.

The investment will provide growth capital to support the evolution of the business through deepening its geographical reach and accelerating investments in technology and risk management capabilities. Avendus Capital acted as the exclusive financial advisor to Arka.

“Many of India’s MSMEs and vehicle operators remain underserved by formal financial services, and Arka has built a disciplined, secured retail lending platform to serve these customers, with the potential to reach even more customers at scale,” said Simit Batra, BU Partner, TPG.

With TPG’s sector experience and innovative approach towards building and scaling successful financial institutions, combined with Kirloskar Group’s long-term institutional commitment, deep understanding of the geography and the customer, Arka is well positioned to capitalize on the vast opportunity in India's secured lending market, the companies said in the statement.

“Crossing ₹1,000 crore in secured retail assets is a defining milestone in our ambition to build a formidable, future-ready financial enterprise, serving entrepreneurial aspirations of our country,” said Samrat Gupta, managing director of Arka.

TPG’s investment marks a significant milestone in Arka’s evolution into a diversified, secured retail lending institution. From its inception in 2018, the company has built a stable and sustainable business. Over the past 18 months, the company has strengthened its leadership, built a pan-regional distribution network, and incubated new secured lending businesses towards delivering value to all stakeholders.

With an AUM of about ₹8,000 crore and a presence across ten states through 146 branches, Arka is building a broader and more granular lending franchise, while continuing to leverage its established wholesale lending platform.

The NBFC offers financing solutions spanning pre-owned vehicle financing, secured business loans, loan against property and wholesale lending. The company serves entrepreneurs, MSMEs, vehicle operators and corporate clients through a combination of specialised lending businesses and a growing distribution network.

TPG's impact platform manages about $37 billion in assets across a family of funds that pursue non-concessionary returns and social and environmental impact at scale through growth equity, private equity, and infrastructure investing strategies. The Rise Funds- a core pillar of its global impact investing platform delivers capabilities and expertise across a wide variety of sectors and countries at scale, focusing on opportunities in climate and decarbonization, education, financial inclusion, healthcare, and impact technology.

“As a group, we have always placed great value on enduring partnerships and the institution-building ethos of creating businesses that stand the test of time,” said Gauri Kirloskar, vice chairperson and managing director, Kirloskar Oil Engines Ltd (KOEL).

KOEL is one of the flagship companies of the Kirloskar Group, which has been in business for eight decades. It is one of the leading engineering and manufacturing companies and offers a energy and power solutions, including engines, generator sets, industrial engines, agricultural equipment, and water management solutions.

Priyamvada C

Priyamvada is a Mumbai-based business journalist at Mint. She writes about the public and private markets with a key focus on venture capital, private equity, M&As and private credit. Her coverage also spans startups and emerging businesses.<br><br>Over the last two years, she has uncovered some of the largest deals and interviewed important decision-makers from India’s investment ecosystem. She likes to dabble across different formats like long forms and explainers. Her work has been consistently displayed on the publication's deals page, and she has also written multiple front-page stories.<br><br>Prior to joining Mint in 2024, she worked out of Reuters’ Bengaluru bureau where she extensively covered the travel, transportation, and logistics industries. Across both her stints, Priyamvada has displayed rigour for breaking news and analyzing interesting data-driven trends. She holds a postgraduate diploma from the Asian College of Journalism's Bloomberg programme. In her free time, she enjoys reading books and trying out different cuisines. She is keen to delve deeper into the various sectors she covers and is always up for a chat. You can reach out to her at priyamvada.c@livemint.com.

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