Private equity giant KKR is set to back new age Retail / MSME focused NBFC InCred Finance. We understand that the equity injection will take the form of a merger of KKR’s wholesale NBFC with InCred’s Retail franchise. The aim appears to be to create a strong tech-focused Indian financial services behemoth.
KKR and its limited partners will pick up a large minority interest in InCred, emerging as the largest investor bloc in the Mumbai headquartered lender, sources familiar with the matter said.
The combined entity will operate under the InCred brand name, and post the deal, the merged book size will be around Rs 6,000 crores, with a relatively low debt-equity ratio.
The four-year-old InCred, founded by former Deutsche banker Bhupinder Singh, is known for using Risk Analytics and Technology as the centrepiece of its strategy to build a strong footprint in lending to Retail and MSME sectors.
InCred has raised over Rs 1,000 crores till date from a set of investors including Investcorp, Manipal chief Ranjan Pai, Dutch Govt-owned FMO, Moore Venture Partners, Paragon, Elevar and OAKS Asset Management amongst others. KKR India Financial Services Ltd also has two other marquee investors – Abu Dhabi Investment Authority (ADIA) and Texas Teacher Retirement System. Both these investors will also join the InCred equity roster.
KKR and InCred are said to have signed an exclusivity agreement. Valuation details could not be ascertained, sources said
KKR has been on an India deal-making spree pumping $1.5 billion into Reliance Jio Platforms and announcing a majority acquisition of JB Chemicals for as much as $500 million. The global investor, managing assets worth $277 billion, also has a controlling interest in other Indian companies like IndiGrid Trust, EuroKids, Max Hospitals, Avendus Capital and Ramky Enviro Engineers.
With its investment in InCred, KKR is doubling down on its bet in Indian Financial Services, attracted by the vast potential offered by the country’s underserved consumers and small businesses.
KKR is known for backing strong founders and leadership teams with proven execution capabilities, and this investment highlights their belief in Bhupinder Singh and the InCred management team to build a market-leading tech-focused Indian financial services giant.