Creador leads Series C for India’s Kogta Financial

10.10.19 / Author: Tim Burroughs

Creador has led a INR3 billion ($42 million) Series C round for Kogta Financial, a non-banking finance company (NBFC) looking to deepen its penetration in India’s central and western states.

Creador is investing via its fourth Southeast Asia and India-focused fund, which achieved a first close of $430 million in July. The hard cap has been set at $550 million. The firm’s past investments in the NBFC space include Cholamandalam Investment & Finance and Repco Home Finance, while it retains a position in Ujjivan Small Finance Bank, a microfinance institution turned deposit-taking bank.

Morgan Stanley Private Equity Asia (MSPEA) also took part in Kogta Series C, having led the INR1.54 billion Series B last year. IIFL Seed Ventures Fund, which is operated by IIFL Asset Management, is among the other investors.

Kogta operates 105 branches across eight states, offering financing for commercial vehicles, tractors, and cars as well as extending loans to micro, small, and medium-size enterprises (MSMEs). The company had a loan book of about INR8.25 billion as of September 2019.

According to a statement, Kogta has significantly expanded its branch network and has augmented its second line of management team and borrowing relationships in recent years. Arun Kogta, Kogta’s CEO, said the company now has the right mix of product, profile and geography diversification along with focus on better asset quality and IT systems. Creador will support ongoing expansion efforts.

“The company has demonstrated strong scale-up since the new team took over in 2008 while prudently managing risks, especially in the challenging used commercial vehicle space. With continued focus on secured retail lending, presence in high growth markets robust IT system and collections mechanism, Kogta is uniquely positioned to thrive in the Indian financial services sector,” said Anand Narayan, a managing partner at Creador.