KKR pumps $150m into its India credit business
KKR has committed an additional $150 million in funding to its India-based non-banking financial company (NBFC), citing strong growth prospects for credit investment in the country.
Founded in 2009, KKR India Financial Services (KIFS) provides structured debt solutions to enterprises seeking long-term capital, as well as offering alternative asset management and capital markets products. As a locally incorporated vehicle, it is a source of rupee-denominated funding to businesses that struggle to obtain capital from traditional banks and do not want to give up equity to investors.
KIFS – which brought in Abu Dhabi Investment Authority (ADIA) as a minority investor in 2017 – has deployed more than $5 billion across over 150 deals since inception. Last year, B.V. Krishnan, the firm’s CEO, stepped down for personal reasons.
“Private lending in India is more important than ever. India has been an important part of KKR’s global growth strategy in Asia, and this investment reinforces KKR’s commitment to the region and provides KIFS with additional resources to enable the continued success of its business,” Sanjay Nayar, CEO of KKR India, said in a statement.
KKR’s commitment to KIFS will come from its balance sheet. The private equity firm has a second NBFC, KKR India Asset Finance, that focuses on real estate. It was launched in 2015 in conjunction with GIC Private.
India’s NBFC segment has been troubled by liquidity issues over the past year, following Indian Infrastructure Leasing & Financial Services’ (IL&FS) bankruptcy filing in October 2018. Questions were asked about the sustainability of business models and several local financial institutions cut off funding lines to NBFCs. Rapid government intervention helped stabilize the situation, but liquidity remains tight.
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