Pune: The Rise Funds, TPG’s multi-sector global impact investing strategy, has signed definitive agreements to invest ₹525 crore in Kirloskar Group-promoted non-banking financial company (NBFC) Arka Fincap Limited, with the potential to invest an additional ₹275 crore through a subsequent tranche, subject to the achievement of specified business milestones and requisite regulatory approvals.
The strategic investment from The Rise Funds marks a significant milestone in Arka Fincap’s evolution into a diversified, secured retail lending institution.
The initial investment of ₹525 crore, along with the potential additional investment of ₹275 crore, is expected to support the company’s growth strategy and retail lending transformation.
Founded in 2018, Arka Fincap has expanded its scale and established 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 to deliver value to all stakeholders.
Arka Fincap currently has assets under management (AUM) of approximately ₹8,000 crore and operates across ten states through 146 branches.
The company is building a broader and more granular lending franchise while continuing to leverage its established wholesale lending platform.
The Rise Funds Investment to Support Arka Fincap’s Expansion
The investment from The Rise Funds will provide growth capital to support Arka Fincap’s next phase of business expansion.
The capital will help the company deepen its geographical reach and accelerate investments in technology and risk management capabilities.
TPG’s extensive sector experience and approach towards building and scaling financial institutions, combined with the Kirloskar Group’s long-term institutional commitment and understanding of regional markets and customers, are expected to strengthen Arka’s position in India’s secured lending market.
Gauri Kirloskar, Vice Chairperson and Managing Director of Kirloskar Oil Engines Limited, said: “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. We seek partners who share this philosophy, and we see a strong alignment with TPG’s approach.”
Arka Fincap Targets Growth in Secured Retail Lending
Samrat Gupta, Managing Director of Arka Fincap Limited, said “We believe resilient financial institutions are built on capital anchored in character, customer servicing and unwavering tech-led credit discipline.
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. Kirloskar Group’s established legacy and TPG’s global investment expertise create a trustworthy platform for Arka’s next phase of growth.”
The investment from The Rise Funds comes as Arka expands its presence in secured retail lending, including vehicle financing and lending to small businesses.
Simit Batra, BU Partner at TPG, said many of India’s micro, small and medium enterprises (MSMEs) and vehicle operators continue to remain underserved by formal financial services.
“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. We are excited to partner with the Kirloskar Group and Arka’s experienced team as the company enters its next phase of growth.”
The Rise Funds’ Investment Focuses on Financial Inclusion
The investment reflects The Rise Funds’ strategy of partnering with growth-stage, mission-driven companies that have the potential to deliver meaningful impact at scale alongside strong financial performance.
Arka Fincap’s expanding presence in vehicle financing and secured lending to small businesses presents an opportunity to increase access to formal credit for entrepreneurs and vehicle operators. These customer segments are important contributors to India’s economic ecosystem.
Through the partnership, The Rise Funds and the Kirloskar Group will support Arka Fincap’s efforts to expand its secured lending operations and reach more underserved customers across the country.
Avendus Capital acted as the exclusive financial advisor to Arka Fincap for the transaction, while AZB & Partners served as its legal advisor. Cyril Amarchand Mangaldas acted as the legal advisor to TPG.
