In a top-level rejig at global private equity fund KKR, the chief executive of its non-banking financial company (NBFC) BV Krishnan has stepped down due to personal reasons. KKR India’s CEO Sanjay Nayar will take over the reins of KKR India Financial Services Pvt. Ltd, said two persons close to the development, who did not wish to be identified.
“Some of the bets in the credit business have not gone down well,” said one of the persons cited above.
KKR is one of the first global private equity firms to set up lending operations in India, as early as a decade ago. KKR India Finance, a non-deposit taking NBFC, which started operations in October 2009, and is engaged in providing structured funding, promoter financing, acquisition funding and mezzanine financing, among others. To be sure, KKR India Financial Services, which lends to corporates, currently has a loan book of Rs6,000 crore and 50 active loans.
“KKR remains committed to the Indian market for the long-term and we continue to recognize the important role KKR India Financial Services plays in supporting the local economy. Through KIFS, we will continue to provide the necessary capital to the home-grown businesses that have difficulty accessing flexible credit to help carry out their business plans,” the spokesperson said.
The rejig comes at a time when rating agency Crisil had downgraded the long-term debt instruments and bank facilities of KKR India Financial Services to ‘CRISIL AA/Stable’ from ‘CRISIL AA+/Stable’. In a report on October 1, Crisil cited “deterioration in the standalone credit profile marked by expected pressure on asset quality and its consequent impact on the earnings profile and capitalisation metrics” for the downgrade.
Over the last three fiscal years, KKR India Finance’s loan book has grown at a CAGR (compound annual growth rate) of 35% to ₹5694 crore, as on March 31, 2019, according to the CRISIL report cited above. The loan book stood at nearly ₹5878 crores as on June 30, 2019.
“KKR is committed to the Indian market for the long term and will look at infusing more capital into the NBFC to keep up with the demand,” said one of the people cited above.
Besides KKR India Financial Services, the global PE firm another NBFC is KKR India Asset Finance, which focuses on real estate lending. KKR also manages domestic credit funds and invests in credit deals through its global funds.
This article was first published on livemint.com.