Kirloskar-backed Arka Fincap signs ₹525 crore investment deal with TPG

Arka Fincap has secured an initial investment of ₹525 crore from TPG to expand its retail lending and technology operations.

Kirloskar Group-promoted non-banking financial company (NBFC) Arka Fincap has signed definitive agreements with global alternative asset management firm TPG for an initial investment of ₹525 crore, with the possibility of an additional ₹275 crore subject to specified business milestones and regulatory approvals.

The investment is being made through TPG's The Rise Funds, its impact investing platform. The capital will support Arka's expansion in secured retail lending, geographical reach and investments in technology and risk management, the company said in a statement on November 6.

Arka has assets under management (AUM) of around ₹8,000 crore, including a secured retail lending portfolio of more than ₹1,000 crore. The NBFC operates across 10 states through 146 branches and has a workforce of over 2,000 employees.

The company, established in 2018, offers financing solutions including pre-owned vehicle loans, secured business loans, loans against property and wholesale lending.

The proposed investment comes as Arka looks to expand its secured retail lending operations while continuing its wholesale lending business.

Gauri Kirloskar, Vice Chairperson and Managing Director of Kirloskar Oil Engines, said the partnership aligns with the group's focus on long-term business development.

Samrat Gupta, Managing Director of Arka Fincap, said the company had crossed ₹1,000 crore in secured retail assets, marking a milestone in its expansion plans.

TPG's investment will also support Arka's lending to small businesses and vehicle operators, segments that the company sees as having potential for greater access to formal credit.

Arka Fincap is promoted by Kirloskar Oil Engines Limited and is rated CRISIL AA/Stable.