TPG invests ₹525 crore in Kirloskar-backed Arka Fincap

Mumbai: TPG’s The Rise Funds will invest an initial ₹525 crore in Kirloskar Group-promoted non-banking financial company (NBFC) Arka Fincap, as the private equity investor looks to tap the growing opportunity in India's secured retail lending market.

The investment could increase to ₹800 crore through an additional tranche of ₹275 crore, subject to the achievement of specified business milestones and requisite regulatory approvals, Arka said in a statement on Saturday.

The investment will provide growth capital to Arka as it seeks to expand its secured retail lending businesses, deepen its geographical presence and strengthen its technology and risk management capabilities, it said.


Founded in 2018, Arka has built assets under management (AUM) of around ₹8,000 crore, including a secured retail lending portfolio of more than ₹1,000 crore. The company operates through 146 branches across 10 states and employs over 2,000 people. While it has an established wholesale lending platform, Arka has been expanding its retail lending operations, particularly in vehicle financing and secured loans to small businesses.

Arka is promoted by the Kirloskar Group through publicly listed Kirloskar Oil Engines Ltd.

TPG's investment is being made through The Rise Funds, its global impact investing platform, which backs growth-stage companies seeking to deliver measurable social impact alongside financial returns.

The investment thesis is also aligned with the opportunity to expand access to formal credit among India's underserved micro, small and medium enterprises (MSMEs) and vehicle operators.

“As a Group, we have always placed great value on enduring partnerships and the institution-building ethos of creating businesses that stand the test of time. We seek partners who share this philosophy, and we see a strong alignment with TPG’s approach," said Gauri Kirloskar, Vice Chairperson and Managing Director, Kirloskar Oil Engines Limited.

“At Arka, we believe resilient financial institutions are built on capital anchored in character, customer servicing and unwavering tech-led credit discipline. Crossing ₹1,000 crore in secured retail assets is a defining milestone in our ambition to build a formidable, future-ready financial enterprise, serving entrepreneurial aspirations of our country," said Samrat Gupta, Managing Director, Arka Fincap Limited.

Simit Batra, BU Partner, TPG, said," Many of India’s MSMEs and vehicle operators remain underserved by formal financial services, and Arka has built a disciplined, secured retail lending platform to serve these customers, with the potential to reach even more customers at scale."

Avendus Capital acted as the exclusive financial advisor to Arka, while AZB & Partners advised the company on legal matters. Cyril Amarchand Mangaldas was the legal advisor to TPG.