Kirloskar Oil Engines-backed Arka Fincap has signed definitive agreements with TPG's The Rise Funds for an investment of up to ₹800 crore across two tranches, as the non-banking financial company looks to accelerate its growth and expand its secured retail lending business.
The investment comprises an initial ₹525 crore, with the potential for an additional ₹275 crore through a subsequent tranche, subject to the achievement of specified business milestones and requisite regulatory approvals, Arka said in a statement on Saturday, November 7.
The capital infusion will support Arka's expansion into new geographies, while accelerating investments in technology and risk management capabilities. The partnership is aimed at building a scaled, diversified and secured retail-led financial institution.
Founded in 2018, Arka has built assets under management of around ₹8,000 crore, including a secured retail portfolio of over ₹1,000 crore. It operates through 146 branches across 10 states and employs more than 2,000 people. The company has also strengthened its leadership and expanded its distribution network over the past 18 months, while building new secured lending businesses alongside its established wholesale lending platform.
Gauri Kirloskar, Vice Chairperson and Managing Director of Kirloskar Oil Engines, said the partnership reflects the group's focus on long-term relationships and institution-building. Arka Managing Director Samrat Gupta said crossing ₹1,000 crore in secured retail assets was a key milestone in the company's ambition to build a technology-led financial services business.
Simit Batra, Business Unit Partner at TPG, said Arka's secured retail lending platform offered an opportunity to serve underserved micro, small and medium enterprises and vehicle operators with greater access to formal credit. Arka is promoted by the Kirloskar Group through publicly listed Kirloskar Oil Engines and carries a CRISIL AA/Stable rating.
Avendus Capital acted as the exclusive financial advisor to Arka, while AZB & Partners advised the company on legal matters. Cyril Amarchand Mangaldas was TPG's legal advisor.