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March 2, 2024
PI Global Investments
Finance

IPO-bound SK Finance garners ₹1,328 crore in fresh equity from existing investors


SK Finance, an NBFC specializing in financing for both used and new vehicles as well as secured business loans, secured 1,328 crore in funding. The investment was led by existing investors, including notable names such as Norwest Venture Partners, TPG Growth, and Baring Private Equity India, alongside contributions from select new investors.

New investors in this venture comprise Duro Capital, Axis Alternatives, Ananta Capital, and Mirae Asset Venture Investments (India). Motilal Oswal’s private equity firm, MO Alternate Investment Advisors, joined this substantial fundraising effort as an incoming investor, injecting 415 crore for a minority stake. The transaction was exclusively advised by DC Advisory India.

SK Finance is currently engaged in discussions regarding an initial public offering (IPO) and is targeting to launch the issue later this year. Reports suggest that the anticipated IPO is expected to be in the range of 2000-2500 crore.

SK Finance boasts a diverse product portfolio, encompassing commercial vehicle loans, car loans, tractor loans, two-wheeler loans, and secured business loans.

“The investments from our existing investors and our new investors MO Alts who invested as a part of a larger round along with others, fortifies the conviction placed by them on our business model and our team. This primary capital infusion will help accelerate our growth through proposed investments in brand, distribution, technology and people,” said Rajendra Kumar Setia, Managing Director and CEO, SK Finance.

The company has demonstrated a compound annual growth rate (CAGR) of over 40% for the six-year period spanning from FY17 to FY23. It has successfully cultivated a diversified lending franchise, enabling it to secure debt capital at regular intervals. The combination of reliable equity raises and this strategic lending approach has been instrumental in sustaining and bolstering its overall growth.

“We are pleased to see the significant progress being made by SK Finance since our initial investment in 2018, with the company today emerging as a scaled player in the used vehicle and MSME lending space. In addition to developing a robust operational model, the company’s tech supported business has delivered improved efficiencies,” said Simit Batra, Principal, TPG Growth.

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