SK Finance raises INR 1,328 crore through a mix of primary and secondary capital from existing and incoming investors

23 January 2024, Jaipur: SK Finance Limited (“SK Finance” or “Company”), an NBFC engaged in used and new vehicle financing and secured business loans, completed an equity round to talling ~INR1,328 crore from existing investors namely Norwest Venture Partners, TPG Growth, Baring Private Equity India and incoming investors namely Duro Capital, Axis Alternatives, Ananta Capital and Mirae Asset Venture Investments (India).

Motilal Oswal’s private equity firm – MO Alternate Investment Advisors (“MO Alts”) also participated in this larger fund raise as an incoming investor investing ~INR 415 crore for a minority stake.

DC Advisory India was the exclusive financial advisor for the transaction.

Founded by Mr. Rajendra Kumar Setiain in 1994, SK Finance has a diversified product portfolio consisting of commercial vehicle loans, car loans, tractor loans, two-wheeler loans and secured business loans. The Company has grown at a 6-year CAGR (FY17-23) of over 40% and has developed a diversified lending franchise, which has helped it raise debt capital at regular intervals. This backed by consistent equity raises, have helped support its growth.

Talking about the transaction, Rajendra Kumar Setia, Managing Director and CEO of SK Finance said, “The investments from our existing investors Norwest Venture Partners, TPG Growth, Baring Private Equity India 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.”

Yash Setia, Whole Time Director at SK Finance said, “Support from existing investors reiteratesthe faith put by them in our business and we welcome all new investors to partner in our journey ahead. Serving the unbanked and under–banked has been our priority since inception and we aim to continue to grow and provide inclusive financial solutions to our customers.”

Niren Shah, MD and Head of India, Norwest Venture Partners said “Since our initial investment in 2017, SK Finance has transformed itself into a multiline, multi-geography used vehicle financing and business loans NBFC. SK Finance has delivered improved asset quality across business cycles and has invested in people, technology and infrastructure. With their value proposition, and experienced team led by Mr.Setia, we’re excited to partner with SK Finance for the 5th time.”

Simit Batra, Principal, TPG Growth said “We are pleased to see the significant progress being made bySK 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. This marks our fourth investment in the Company and we are excited to continue our partnership towards the next stage of growth.”

Rahul Bhasin, Managing Partner, Baring Private Equity Partner India said “With a thirty-year legacy in the used vehicle financing space, SK Finance has built a quality franchise catering to customers in rural and semi-urban India. The Company has invested in people and technology which has helped improve productivity, asset quality and achieve scale. Having initially invested in the Company in 2017,Baring Private Equity Partners India has been a part of SK Finance’s growth journey, during which it (AUM) has grown by over 40% CAGR.”

Mr. Vinit Mehta, Managing Director and Head of BFSI at MO Alts commented, “The used vehicle financing space is significantly underpenetrated, and SK Finance’s customer connect and continuing focus on granular ticket size products has led to a learning curve and scale benefits. We are enthusiastic about collaborating with SK Finance to build a financial institution dedicated to livelihood financing for entrepreneurs nationwide.”

About SK Finance Limited:

SK Finance, headquartered in Jaipur and founded in 1994 by Mr. Rajendra Kumar Setia, is an NBFC engaged infinancing used and new commercial vehicles (LCV’s, SCV’s and ICV’s), cars, tractors,two-wheelers and secured business loans with a presence across 12 states and union territories via a network of ~500 branches and over 9,600 employees as of September 2023. The Company primarily focuses on catering to low-mid income, self-employed individuals who are largely underbanked and have minimal accesst o organised lending. The company is rated as AA- by CARE, ICRA, India rating sand A+ rating from CRISIL across various facilities as of September 30, 2023.

For more information, visit https://www.skfin.in/home

About Norwest Venture Partners:

Norwest Venture Partners is a leading venture and growth equity investment firm managing more than $12.5billion in capital. Since its inception, Norwest has invested in more than 650 companies and currently partners with more than 200 companies in its venture and growth equity portfolio. The firm invests in early- to late-stage businesses across a wide range of sectors with a focus on financial services, consumer, enterprise, and healthcare.

For more information, visit www.nvp.com

About TPG:

TPG (Nasdaq: TPG) is a leading global alternative asset management firm, founded in San Francisco in 1992,with $212 billion of assets under management and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions, and our unique strategy is driven by collaboration, innovation, and inclusion. Our teams combine deep product and sector experience with broad capabilities and expertise to develop differentiated insights and add value for our fund investors, portfolio companies, management teams, and communities.

For more information, visit www.tpg.com

About Baring Private Equity India:

Baring Private Equity Partners India is one of the oldest PE funds in the Indian subcontinent and has invested~US$ 1 billion across companies in the region. Baring India has invested in over 90 companies across diverse verticals such as Technology, Life sciences, Banking and Financial services, Manufacturing, Real estate, and Consumer goods, and supported over 40 first generation entrepreneurs.

For more information, visit www.bpepindia.com

About MO Alternate Investment Advisors:

MO Alternate Investment Advisors Private Limited is co-founded by Mr. Vishal Tulsyan along with Motilal Oswal Financial Services Limited (MOFSL). MO Alts is a subsidiary of MOFSL, adiversified financial services group with businesses in Securities, Asset Management, Housing Finance, Private Equity and Investment Banking. MO Alts manages both private equity and real estate funds with a cumulative AUM of ~USD2.0 bn between the two asset classes.

For more information, visit https://www.motilaloswalalt.com/private-equity/

This announcement is not being made in and copies of it may not be distributed or sent into the United States, the United Kingdom, Canada, Australia or Japan.

The securities referred to here in may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. SK Finance Limited does not intend to register any of the securities in the United States or to conduct a public offering of the securities in the United States.