Bengaluru: Global alternatives assets major KKR is in advanced discussions to merge its corporate lending unit KKR India Financial Services with InCred Finance, started by former Deutsche Bank executive Bhupinder Singh. This would be one of the major consolidation moves in the non-banking finance companies (NBFC) space.
The two companies have entered into exclusive discussions for the next six-eight weeks, said sources briefed on the matter, as they look to finalise terms. The deal, if successful, will create an NBFC with a loan book of over Rs 6,000 crore with a focus on the consumer lending segment.
The deal will make KKR and its backers, which include sovereign wealth fund Abu Dhabi Investment Authority (ADIA) and US-based Texas Teacher Retirement System, the largest direct shareholders in the merged entity. They would hold a little over a third of the company.
“The deal will give InCred exposure to a corporate lending portfolio, which its team has had an experience in managing besides backing of large investors as well. There is no capital infusion needed right now as both companies have low gearing ratios,” said one of the sources briefed on the matter. KKR had also held discussions with other NBFCs for a potential deal for the last few quarters.
KKR and InCred spokespersons declined to comment when contacted by TOI. KKR India Asset Finance, another NBFC floated by the PE firm to focus on the real estate space, is not part of the deal.
InCred has raised over Rs 1,000 crore till now from Investcorp, Manipal chief Ranjan Pai, Dutch government-owned FMO, Moore Venture Partners, Paragon Partners, Elevar, former Deutsche Bank global CEO Anshu Jain and OAKS Asset Management. It also recently announced a Rs 500-crore debt fund-raise as well.
The deal comes after KKR said it will infuse $150 million in the unit.