Multiples leads $111m Series D for India NBFC

Canada Pension Plan Investment Board (CPPIB) came in as a new investor with support from existing backers Creador and Morgan Stanley Private Equity Asia (MSPEA). Creador led a INR 3bn Series C in 2019, while MSPEA led a INR 1.5bn Series B the prior year and supported the Series C.

The latest round provides a full exit for IIFL Asset Management’s Seed Venture Fund, which became the first institutional investor in the NBFC in 2016. The fund, which also participates in later stage rounds, re-upped as late as the Series D.

Kogta claims to have grown more than 50% every year since IIFL’s initial investment, including during the pandemic. “Under the leadership of [CEO Arun Kogta and CFO Varun Kogta], the company has exhibited profitable growth despite multiple headwinds,” Amit Mehta, a principal at IIFL, said in a statement.

Kogta has built out a network of 200,000 customers and about 175 branches across eight Indian states since its inception in 1996. Nithya Easwaran, a managing director at Multiples, described it as having in-house technology and systems that allowed for superior turnaround times and customer insights.

The company currently has around INR 20bn in assets under management (AUM) across commercial vehicles, passenger vehicles, tractors, and micro and small to medium-sized enterprise (MSME) loans. It claims AUM has doubled in the past two years and has the potential to hit INR 50bn by 2024.

Access to credit – in addition to logistical, inventory and operational digitisation – is a major pain point for India’s more than 64m MSMEs. This sector, said to be facing a USD 380m credit gap and severe modernisation challenges, has proven a difficult target for direct private equity investment.

However, the demand for MSME credit options has underpinned consistent PE interest in the supporting NBFC segment, even as market shocks have shaken up business models. This has included a strong shift toward retail-focused lending programs, especially in the service of MSMEs.

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• Topics
• South Asia
• Financials
• Expansion
• India
• Multiples Alternative Asset Management
• Canada Pension Plan Investment Board (CPPIB)
• Morgan Stanley Private Equity Asia
• Creador
• IIFL Wealth Managment
• NBFCs
• SME