TPG Growth leads ₹310 crore round in NBFC Ess Kay Fincorp

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Jaipur-based non-banking finance company (NBFC) Ess Kay Fincorp has raised around ₹310 crore ($42 million) in a funding round led by TPG Growth.

Other existing investors that participated in the round include Norwest Venture Partners and Evolvence India.

Investment bank Spark Capital acted as the sole financial advisor for the latest transaction.

Earlier this year in January, Ess Kay Fincorp raised $32 million in a funding round from Norwest Venture Partners, Evolvence India, and Baring Private Equity India. With the latest round of funding, Ess Kay Fincorp has raised $74 million in 2018, so far.

Ess Kay Fincorp was founded by Rajendra Setia in 1994. The company offers loans to rural and semi-urban customers to help them buy used vehicles including commercial vehicle, car, agricultural equipment, two and three-wheeler and MSME loans for small businesses.

The company has a presence across Rajasthan, Gujarat, Punjab, Haryana, Madhya Pradesh and Maharashtra with a network of over 200 branches.

Gaurav Trehan, Partner at TPG, said, “With its differentiated business model supported by a direct sourcing network, hands-on approach to underwriting, quick turnaround and robust collection mechanism, Ess Kay Fincorp has demonstrated a unique advantage and opportunity in a difficult to serve category.”

As of March 2018, Ess Kay Fincorp’s loan book stands at ₹1,282 crore, with a gross NPA margin of 3.37%. The average ticket size for vehicle loans is ₹3 lakh, over an average period of three years and ₹7 lakh for SME loans, over a period of five years.

The company is looking to expand its loan book to ₹2,500 crore by FY19 and to ₹6,000 by FY22.

Other NBFCs focused on providing loans to SMEs in India include Capital Float, Aye Finance, Vistaar Finance, and Capital First, among others.

Here is a list of top 10 SME lending startups in India, enabling small businesses to grow.

Founded in 2007, TPG Growth focuses on growth equity and middle-market buyout opportunities. TPG Growth currently manages approximately $13.5 billion in assets across a variety of sectors including media, technology, and industrials.

Some of its investments in India are online ticket booking platform BookMyShow, online eyewear marketplace Lenskart, Jana Small Finance Bank, and Manipal Hospitals.

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