Non-bank lender Kogta Financial (India) Ltd has raised Rs 300 crore (about $42.3 million) in a Series C round of funding led by new private equity investor Creador.
Existing backer Morgan Stanley Private Equity also invested in this round, Jaipur-based Kogta said in a statement. It added that IIFL Seed Ventures Fund, the first institutional investor in Kogta, also remains invested in the company.
The IIFL fund had invested an undisclosed sum of money in Kogta in October 2016. The fund typically invests Rs 15-50 crore in a firm. Morgan Stanley PE had led a Rs 154-crore funding round in Kogta late last year.
The investment marks another move by India- and Southeast Asia-focussed private equity firm Creador in India’s finance industry. It had earlier backed Cholamandalam Investment & Finance Co. Ltd, City Union Bank and Repco Home Finance Ltd, and exited these companies between 2014 and 2017, according to VCCEdge, the data and research platform of Mosaic Digital.
Creador’s only other existing portfolio company in the Indian financial services sector is Ujjivan Financial Services Ltd. In fact, Ujjivan is Creador’s biggest bet on an Indian company.
Kogta Financial didn’t disclose the breakup of the funding it received from the investors. However, a spokesperson for Creador told VCCircle that the PE firm invested Rs 225 crore in the company.
The non-banking financial company’s post-money valuation after this infusion is Rs 1,300 crore, the spokesperson said.
Kogta, which mainly offers loans for used and new vehicles, will use the fresh capital to expand in new markets, grow lending to small and medium-sized businesses, and sustain its asset quality.
Chief executive officer Arun Kogta said the partnership with Creador would also help strengthen its systems and processes.
Creador managing partner Anand Narayan said in a statement that the firm was confident in its investment because of Kogta’s strong operations as well as its risk management procedures in the market for used commercial vehicles.
“With continued focus on secured retail lending, presence in high growth markets, robust IT system and collections mechanism, Kogta is uniquely positioned to thrive in the Indian financial services sector,” Narayan said.
Kogta was founded in 1996 and operates 105 branches across eight states in central and western India. It has more than 30,000 active customers and a loan book of Rs 825 crore as of September.
NBFC funding deals
Private investment activity in the NBFC segment has risen even as the sector continues to face a liquidity crunch that began after infrastructure developer and financier IL&FS collapsed last year.
Last month, digital lending platform LoanTap, which offers loans and overdraft products to salaried professionals, raised $12 million in a Series B investment led by Avana Capital, a US-based debt fund.
Flipkart co-founder Sachin Bansal acquired Chaitanya Rural Intermediation Development Services Pvt. Ltd by investing Rs 739 crore (about $104 million) in the company and taking charge as its CEO.