Retail-focused non-banking financial company Kogta Financial has secured Rs 154 crore in a financing round led by a fund managed by Morgan Stanley Private Equity Asia and existing backer IIFL Seed Ventures.
The Morgan Stanley Private Equity Asia managed fund invested about Rs 114 crore for a minority stake, while IIFL Seed Ventures,the first institutional investor in 22-year-old Kogta Financial, put in Rs 40 crore.
“The retail lending space in India offers tremendous opportunity and this investment marks Morgan Stanley Private Equity Asia’s sponsored fund’s third investment in the space in India,” Arjun Saigal, cohead of Morgan Stanley Private Equity Asia in India, said.
Kogta Financial offers financing for commercial vehicles, tractors and cars, besides smallticket loans against property to micro, small and medium enterprises. It operates 80 branches and is present across six states in central and western India, serving over 20,000 customers.
Varun Kogta, its chief financial officer, said the money will be used to expand the company’s operations and enter new geographies. As of September 30, Kogta Financial had a loan book of about ?530 crore. “With this investment from Morgan Stanley and IIFL Seed Ventures Fund, the company’s net worth will increase to more than thrice the current value, thereby considerably strengthening our balance sheet, which will help further enhance conviction of credit rating agencies and lenders,” Kogta said.
Equirus Capital acted as the financial advisor for the transaction. “Since our investment, Kogta has significantly scaled up its operations and grown from strength to strength under the leadership of Arun and Varun. This fund raise validates our investment thesis and provides a platform for further growth to the company,” Amit Mehta, principal at IIFL Asset Management, said.