TPG Growth has led a $42 million (Rs 311 crore) funding round in non-banking finance company Ess Kay Fincorp Ltd.
TPG Growth is the mid-market and growth equity platform of private equity firm TPG.
This is the second round of fundraising by Ess Kay this year. In January, multi-stage private investment firm Norwest had led a $32 million (Rs 200 crore) funding round in Ess Kay. PE firm BanyanTree Growth Capital had fully exited the company in that round.
“With its differentiated business model supported by a direct sourcing network, hands-on approach to underwriting, quick turnaround and robust collection mechanism, Ess Kay Fincorp has demonstrated a unique advantage and opportunity in a difficult to serve category,” said Gaurav Trehan, partner at TPG.
Rajendra Setia, founder and managing director of Ess Kay Fincorp, said that traditional underwriting methods in India exclude a majority of creditworthy individuals and small and medium enterprises. “Our long-standing and partnership-driven approach in our focus geographies has led us to establish a business model that directly addresses the needs of our customers,” he said.
Setia founded Ess Kay in 1994. It commenced operations as a two-wheeler financier in Rajasthan. It now offers loans for commercial vehicles, agricultural and construction equipment, passenger vehicles, two wheelers, and to small businesses.
Ess Kay operates in Rajasthan, Gujarat, Punjab, Haryana, Madhya Pradesh and Maharashtra through a network of 250 branches. As on 30 September 2018, Ess Kay had assets under management of about Rs 1,550 crore.
Investment bank Spark Capital acted as the financial adviser for the latest transaction.
TPG Growth has around $13.2 billion of assets under management. It targets investments in a broad range of industries and regions. In India, it has backed digital payments firm AGS Transact, eyewear retailer Lenskart, surgical equipment maker Sutures India, footwear maker Campus and online ticketing company BookMyShow, among others, in India.
The companies backed by TPG in the financial services sector include Five Star Business Finance, Janalakshmi Financial Services, Shriram City Union Finance and Shriram Transport Finance. In July, TPG had led a $100 million (Rs 685 crore) investment round in Five Star Business Finance.