Morgan Stanley PE Asia fund leads funding in Indian NBFC Kogta

Photo: Reuters

Kogta Financial (India) Ltd, a retail-focused non banking financial company (NBFC), on Thursday announced that it has closed an equity funding round of Rs 154 crores ($21.6 million) led by a fund managed by Morgan Stanley Private Equity Asia and existing investor IIFL Seed Ventures.

Kogta’s plan to raise the funding was first reported by Mint earlier this month.

“The team at Morgan Stanley brings immense experience which will help us further strengthen our systems and processes,” Arun Kogta, MD and CEO of Kogta said.

“With over two decades of lending experience and having navigated through multiple cycles, we have built a differentiated and robust business model with a wide distribution network and large customer base. We hope to continue our growth trajectory and increase penetration across chosen geographies without compromising on credit quality,” he added.

In October 2016, the company had raised an undisclosed amount in a Series A round from IIFL Ventures Fund.

Incorporated in January 1996, Kogta offers financing  for all kinds of commercial vehicles, tractors and cars, besides loans against property, and loans to micro, small and medium enterprises (MSMEs). The company has a network of more than 65 branches across the states of Rajasthan, Gujarat, Maharashtra, Madhya Pradesh and Delhi, with a client base of more than 50000 customers.

According to a report by credit rating agency Icra, Kogta’s loan portfolio was at Rs428.51 crore as on March 2018.

Equirus Capital acted as the exclusive financial advisor to the company on the transaction.

The financial services sector has always been one of the preferred sectors for investment in the country.

In one of the recent notable deals in the sector, TPG Growth, a middle market and growth investment fund, led a $42-million investment in Jaipur-based non-banking finance company Ess Kay Fincorp Ltd. Existing investors Norwest Venture Partners and Evolvence India Fund II Ltd were investing alongside TPG Growth. In January, US-based Norwest, Baring Private Equity India and Evolvence India had led a $32-million equity investment in the NBFC.

Earlier this month, Veritas Finance Pvt Ltd, too, announced raising Rs 200 crore in a series D investment round led by private equity firm Norwest Venture Partners, with participation from existing investors CDC Group Plc and UK’s Development Finance Institution, and anchor investor P. Surendra Pai.

In October, IIFL India Private Equity Fund invested Rs 100 crore ($13.5 million) in KadaiEshwar (KE) Housing Finance. A month prior, New Delhi-based Satya MicroCapital raised $6.2 million (Rs 43 crore) in a round of funding led by Japan’s Gojo & Company, along with existing investor Dia Vikas Capital.

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