Mumbai-based nonbanking finance company InCred Financial Services is set to raise Rs 500 crore ($60 million) in a fresh round of funding from a clutch of investors, including corporate treasuries, global private equity funds, family offices and ultra-high-networth individuals.
In a release issued on Thursday, the lending company said that it has already received the full commitment and post the closure of the round, will achieve a valuation of a billion dollars, thereby entering the unicorn club. The release, however, did not name any of the investors.
“With our ‘risk first’ approach, cutting-edge technology, and class-leading management team, we are well-positioned for sustained growth in the business over the years to come. Our goal is to make InCred a central part of every Indian family’s financial aspirations and to eventually list the business, unlocking significant value for all our shareholders,” said Bhupinder Singh, founder and group CEO, InCred.
Singh, a banking veteran, promoted InCred in 2016. He counts on a bunch of senior finance professionals to run the business. Senior risk professional Krishna Bahety is the chief risk officer, while ex-banker Prithvi Chandrasekhar is CEO of its consumer lending vertical, and Vivek Bansal, who was previously deputy CFO at Yes Bank, is CFO.
In 2022, InCred Finance and KKR India Financial Services merged to create a joint entity under the brand name InCred Finance.
What the funds will be used for
The funds raised in the latest round will be deployed across InCred’s core lending businesses, which offer consumer, MSME and student loans.
In a statement, the company said that the market for student loans has surged with the doubling of US student visas being issued to Indians.
Operations across MSME business loans, especially loans against property and consumer lending, have seen substantial growth, too.
InCred Finance has built a loan book of Rs 7,500 crore within six years, growing at a compound annual growth rate of more than 50% over the last three years. The company has a pre-tax profit of around Rs 170 crore in the first half of the current fiscal year.
Retail focus
In a credit note issued in September, Crisil stated that as on June 30, the assets under management (AUM) mix of the company consisted of around 44% of personal loans, 18% of student loans, 9% allocated to other financial institutions, and 8% towards secured school financing.
The company had shifted its focus towards retail lending, scaling down its wholesale lending book steadily. From around 42% in March 2021 the wholesale exposure had come down to around 17% in June, 2023, Crisil observed.
InCred has raised funding from institutional investors such as Oaks Asset Management, Dutch development finance company FMO, Moore Strategic Ventures, Elevar Equity, and others.
