KKR’s corporate lending arm to merge with NBFC startup Incred Finance; to emerge as largest shareholder

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Updated: Jul 28, 2020 2:37 PM

Credit and Finance for MSMEs: KKR’s investors including the US-based Teacher Retirement System of Texas and UAE’s sovereign wealth fund Abu Dhabi Investment Authority will become the largest investors in the merged entity.

acquisitionThe two lenders are in final stages of discussion for the merger, which if went through, will have a loan book size of approximately Rs 6,000 crore.

Credit and Finance for MSMEs: Global investment firm KKR is looking to merge its non-banking finance company (NBFC) – KKR India Financial Services with MSME and retail-focused NBFC startup InCred Finance along with capital infusion in latter, sources privy to the development told Financial Express Online. The two lenders are in final stages of discussion for the merger, which if went through, will have a loan book size of approximately Rs 6,000 crore. KKR and its investors including the US-based Teacher Retirement System of Texas and UAE’s sovereign wealth fund Abu Dhabi Investment Authority will become the largest investors in the merged entity that will retain the company name Incred, one source said.

Incred Finance decline to comment while KKR said it is unable to provide comments at this time.

Launched by the former head of corporate bank division at Deutsche Bank Bhupinder Singh in 2016, Incred Finance has raised more than Rs 1,000 crores from other investors as well including the Dutch development bank FMO, the US-based Moore Capital, Investcorp Bahrain, Oaks Capital, Dr. Ranjan Pai of Manipal and Anshu Jain, Ex CEO of Deutsche Bank, the company had said in a recent statement. InCred has more than 5 lakh customers in over 20 cities. The company had last raised Rs 500 crore in debt, announced around a week back, from public sector banks and financial institutions.

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KKR had in May announced an investment of Rs 11,367 crore in Mukesh Ambani’s Jio Platforms for 2.32 per cent followed by acquiring a controlling stake in JB Chemicals & Pharmaceuticals for Rs 3,100 crore earlier this month. KKR currently has $277 billion worth assets under management along with controlling stake in multiple other firms such as Max Hospitals, Avendus Capital, and more.

“KKR is aggressively focusing on the huge opportunity emerged with the growing small business base as the government has also been quite active in this segment for some time now with the launch of the Atmanirbhar Bharat campaign. Clubbed with Vocal For Local and Make in India initiatives, the small business community has now been in the limelight to boost India’s growth. This has provided a great lending opportunity for interest players in the market,” said another source.

This story was updated with KKR’s response.

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