Magma Fincorp raises $80m from KKR, Leapfrog, IVFA
Magma Fincorp, an Indian non-banking finance company (NBFC), has raised INR5 billion ($80 million) from KKR, LeapFrog Investments, and India Value Fund Advisors' (IVFA) Indium V.
This is Indium and LeapFrog's first investment in Magma. The firms committed INR2.2 billion and INR2.0 billion, respectively. KKR, which committed $52.7 million to the company in 2011, put in INR800 million.
In a release, Magma said the investment will be used to grow the business and take advantage of opportunities resulting from India's economic growth. The company also said that the investors "have a rich history of working with the management and building world-class enterprises" and can contribute "across strategic and operational aspects of the organization."
Magma, established in 1992, owns 238 branches in 25 Indian states. Most of its branches are in rural or semi-urban areas, and the company offers financing for construction equipment, commercial vehicles, and personal cars, along with mortgages, business loans and insurance. It is listed on the Bombay Stock Exchange and the National Stock Exchange.
KKR's involvement in India's NBFC sector goes beyond third-party investment. The firm has launched two NBFCs itself: KKR India Financial Services in 2009, and another earlier this year with Singapore's GIC Private. The latter venture focuses on real estate lending.
LeapFrog is also involved in Indian NBFCs, having invested $29 million in IFMR Capital last year. This was the first deal out of the firm's latest $400 million fund. The deal with Magma is the fifth transaction.
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