Mizuho Eyes KKR’s Part Stake In InCred Finance

Japan’s Mizuho Financial Group is reportedly in discussions to acquire a portion of KKR’s stake in financial services unicorn InCred Finance at a premium to its most recent valuation of $1.2 Bn.

Global investment firm KKR may divest around 10% of its stake in the Mumbai-based tech-driven non-banking finance company (NBFC), though this may change depending on how the talks progress, multiple sources familiar with the discussions told ET.

According to the report, the negotiations are being held for a premium of up to 30-40% over the $1.2 Bn valuation at which InCred raised $60 Mn in December 2023. This is contrary to typical secondary sales, which usually occur at a lower valuation.

“This is being seen as the entry for certain investors before the IPO and the firm’s valuation is moving 30-40% higher than the last funding valuation. While terms are yet to be finalised, the valuation would be higher,” a person close to the matter told ET.

Inc42 has reached out to InCred for comments on the development. The story will be updated based on the response.

Besides Mizuho, other new investors are also exploring the purchase of a secondary stake ahead of a potential initial public offering (IPO) by InCred in the next one to two years.

Among others, the late Anshu Jain, former co-CEO of Deutsche Bank, was an investor in InCred.

Mizuho is Japan’s financial institution with a presence in banking and asset management, announced a $145 Mn investment in Credit Saison India in February.

In 2022, InCred Financial merged with KKR’s non-banking financial company, KKR India Financial Services. The merged entity is being run by Singh, with KKR and other investors owning a stake in the firm.

InCred became a unicorn in December, last year after raising $60 Mn from a group of high-net-worth individuals (HNIs), including Manipal Group Chairman Ranjan Pai’s family office.

The development comes days after Incred Alternative Investments, the alternative asset management unit of InCred Capital, marked the first close of its maiden private equity fund.

Founded in 2016 by Bhupinder Singh, InCred Group operates in the BFSI sector through three separate entities – lending vertical InCred Finance, wealth and asset management vertical InCred Capital, and retail bonds and alternative investments platform InCred Money. 

Besides, InCred Financial Services’ net profit quadrupled to INR 120.9 Cr in the financial year 2022-23 (FY23) from INR 30.8 Cr in the previous fiscal year, driven by a sharp rise in interest income and fees and commission income.