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Private Equity Firm KKR To Merge NBFC With InCred’s Retail Franchise

Private Equity Firm KKR To Merge NBFC With InCred’s Retail Franchise

KKR will pick up a large minority stake in InCred, making it the largest investor in the Mumbai-based digital lending startup

The combined entity will operate under the InCred brand name, and post the deal, the merged book size will be around INR 6,000 Cr

Last week, InCred raised $69 Mn in debt from public sector banks and financial institutions

Global private equity firm KKR is set to back Mumbai-based InCred Finance, a retail and MSME-focused non-banking finance company (NBFC). 

The equity infusion is understood to be effectively a merger of KKR’s NBFC with InCred’s retail franchise. KKR will pick up a large minority stake in InCred, making it the largest investor in Mumbai-headquartered lender, sources said. 

The combined entity will operate under the InCred brand name, and post the deal, the merged book size will be around INR 6,000 Cr with a relatively low debt-equity ratio.

Founded in 2016 by former Deutsche banker Bhupinder Singh, InCred is known for leveraging risk analytics and technology in lending to retail and MSME sectors. 

InCred has raised over INR 1,000 Cr till date from a range of investors including Investcorp, Manipal chief Ranjan Pai, Dutch Govt-owned FMO, Moore Venture Partners, Paragon, Elevar and OAKS Asset Management amongst others. KKR India Financial Services Ltd also has two other marquee investors – Abu Dhabi Investment Authority (ADIA) and Texas Teacher Retirement System. Both these investors will also join the InCred equity roster.

KKR and InCred are believed to have entered into an exclusivity arrangement. Valuation details couldn’t be ascertained, sources said. 

Meanwhile, KKR has been on an India-investing spree. In May, the American global investment firm invested INR 11,367 Cr in Reliance Jio for a 2.32% equity stake in the company. It also announced a majority acquisition of JB Chemicals for $500 million. The global investor, managing assets worth $277 billion, also has a controlling interest in other Indian companies like IndiGrid Trust, EuroKids, Max Hospitals, Avendus Capital and Ramky Enviro Engineers. 

As for InCred, last week, the fintech platform raised $69 Mn (INR 500 Cr) in debt from various public sector banks and other financial institutions to expand operations across segments such as consumer, education and small and medium enterprises (SME). The round also saw participation from US-based asset manager Moore Capital, India and Latin America-focused PE fund Elevar, and existing investor Alpha Capital.

Last month, the digital lending startup acquired Bengaluru-based fintech platform Qbera, in a deal touted to be around $10 Mn to $15 Mn. With the deal, InCred had aimed at expanding its portfolio of consumer loans and distribution reach.