The Fact Maker

SK Finance raises equity capital from IIFL Wealth and other new investors

SK Finance, a Jaipur based NBFC incorporated in 1994 and formerly known as Ess Kay Fincorp, recently closed its Series F fundraise wherein it cumulatively raised about INR 400 crores from IIFL Wealth and other new investors. SK Finance is one of the largest and systematically important non-deposit accepting asset finance retail franchisee in the Indian mid-market space and is backed by marquee investors including TPG Growth, Norwest Venture Partners, Baring India, and Evolvence India Fund. With this capital raise, the company to-date has cumulatively raised about INR 1,400 crores from six investors.

SK Finance offers financing for five different product segments including commercial vehicles, agricultural and construction equipment, passenger vehicles, two wheelers and small business loans. The company has a dominant market leadership position in its focus geographies, deep penetration across 10 states through an extensive distribution network of 390 branches and a sustainable platform to build scale. The company has created a niche position in rural and semi-urban markets with deep distribution across North, West and Central India through on-ground sales, underwriting, and collection infrastructure to cater to the underserved customer segment. As of September 30, 2021, SK Finance had an active borrower base of approximately 220,000 individuals and assets under management of approximately INR 4,100 crores.

SK Finance, being one of the oldest NBFCs, has seen multiple cycles and disruptions in the business environment given multiple external events over the last few years. The company has continued to fare well both in terms of growth and asset quality, having delivered a loan book growth at 40%+ CAGR over the last seven years while maintaining healthy asset quality and return profile.

“We welcome IIFL AMC and other new investors to the SK family. The current investment will enable the company to continue its growth trajectory and further strengthen the leadership position built over the years. We are grateful to our existing investors for their continued support and confidence in the company. Our existing investors along with the new investors as well as our 55+ lending partners add tremendous strength to our balance sheet and growth plans, as we remain committed to creating value for all our stakeholders,” said Rajendra Setia, Managing Director and CEO of SK Finance.

Spark Capital acted as the financial adviser to the company in relation to the fundraising round.