03 January 2018, India:
Jaipur based vehicle and SME finance company Ess Kay Fincorp Ltd has raised ₹200 crore ($32 million) in a funding round. The round was led by Norwest Venture Partners, Baring Private Equity India and Evolvence India.
Norwest has invested ₹108 crore in the company. Baring and and Evolvence invested ₹92 crore. Spark Capital Advisors was the financial advisor to Ess Kay Fincorp in this transaction.
Atul Arora, Chief Financial Officer at Ess Kay Fincorp said, “BanyanTree Growth Capital, with a 25% stake, completely exited the company as part of this round.”
Banyan Tree had invested ₹18 crore and had a 25% stake in Ess Kay Fincorp. It walked away with a return of more than five times its initial investment.
Arora added, “Last year, we significantly scaled up in Gujarat. Our focus now is to expand presence in Madhya Pradesh, Maharashtra, Punjab and Haryana. The company is aiming at a loan book of ₹2,500 crore by March 2019 and ₹6,000 crore by 2022.”
The capital raised will be used by Ess Kay Fincorp to invest in building scale by deepening its presence in existing locations and expanding operations into new geographies.
Niren Shah, Managing Director at Norwest Venture Partners India said, “Given Norwest’s significant focus on investing in the Indian financials space, we found that Ess Kay is a differentiated NBFC with a focus on the semi-urban market for vehicle and small enterprise finance where it has demonstrated a track record of fast growth together with robust credit. With this growth equity round, Ess Kay is well positioned to leverage its strong franchise, excellent core team, distribution and large market opportunity to drive exponential growth”.
Ess Kay Fincorp was founded by Rajendra Setia in 1994. It provides vehicle finance and SME finance in rural and semi-urban India. The company mostly finances second-hand vehicles, which constitute about 90% of its portfolio.
The company operates through a network of around 240 branches in six states in India. The average ticket size for vehicle loans is ₹3 lakh over an average tenure of three years and ₹7 lakh for five-year SME loans.
(Image – LinkedIn)