TPG’s The Rise Funds will invest an initial ₹525 crore in Kirloskar Group-promoted non-banking financial company (NBFC) Arka Fincap Limited, the company said in a statement on 7 November 2026. A further ₹275 crore may follow through a subsequent tranche, subject to specified business milestones and regulatory approvals, taking the potential commitment to ₹800 crore.
The capital is earmarked as growth funding for Arka’s secured retail lending franchise—covering vehicle finance and secured loans to small businesses—alongside deeper geographical reach and stronger technology and risk management. The move adds to earlier Elets coverage of Arka’s MSME push, including its Uday small-ticket MSME loan product.
What the TPG–Arka Fincap deal covers
Arka said it has signed definitive agreements with The Rise Funds, a core pillar of TPG’s global impact investing platform. The investment thesis, the company said, aligns with expanding formal credit for underserved micro, small and medium enterprises (MSMEs) and vehicle operators in India.
Founded in 2018 and promoted through publicly listed Kirloskar Oil Engines Limited (KOEL), Arka reported assets under management (AUM) of about ₹8,000 crore, including a secured retail book of more than ₹1,000 crore. It operates 146 branches across 10 states and employs over 2,000 people, while continuing to run an established wholesale lending platform spanning pre-owned vehicle finance, secured business loans, loan against property and wholesale credit. The firm has also previously partnered banks on MSME lending, as in its arrangement with Central Bank of India.
What Kirloskar, Arka and TPG said
Gauri Kirloskar, Vice Chairperson and Managing Director, Kirloskar Oil Engines Limited, said the Group values enduring partnerships and institution-building, and sees strong alignment with TPG’s approach. She described the partnership as the start of a meaningful, long-term relationship for Arka, TPG and customers across the country.
Samrat Gupta, Managing Director, Arka Fincap Limited, said resilient financial institutions are built on capital anchored in character, customer servicing and tech-led credit discipline. Crossing ₹1,000 crore in secured retail assets, he added, is a defining milestone in building a future-ready franchise for entrepreneurial India. Simit Batra, BU Partner, TPG, said many of India’s MSMEs and vehicle operators remain underserved by formal finance, and that Arka has built a disciplined secured retail platform with room to scale.
Why it matters for NBFC and MSME lending
Private capital into diversified NBFCs remains a live theme on the Elets BFSI desk, from Wonder Home Finance’s ₹500 crore raise from GCP to AI-led lenders such as Kissht crossing ₹10,000 crore in AUM. Arka’s deal sits in that lane: growth equity aimed at secured retail depth rather than unsecured scale-at-any-cost.
MSME secured lending partnerships elsewhere—such as Godrej Finance and Muthoot FinCorp’s secured MSME push—underline why investors favour asset-backed books when credit cycles tighten. For Arka, TPG’s cheque plus Kirloskar’s institutional backing is meant to fund branch expansion, technology and risk systems as the retail book grows beyond ₹1,000 crore.
Avendus Capital acted as exclusive financial advisor to Arka. AZB & Partners advised Arka on legal matters, while Cyril Amarchand Mangaldas advised TPG. Coverage of the announcement is also available from the Economic Times and Hindu BusinessLine.
Key takeaways
- TPG’s The Rise Funds will invest an initial ₹525 crore in Kirloskar-promoted NBFC Arka Fincap, with a further ₹275 crore possible subject to milestones and approvals.
- Proceeds target secured retail lending expansion, geography, technology and risk management; Arka’s AUM is about ₹8,000 crore with secured retail above ₹1,000 crore.
- Arka runs 146 branches across 10 states and employs over 2,000 people; advisors include Avendus, AZB and Cyril Amarchand Mangaldas.
FAQ
How much is TPG investing in Arka Fincap?
An initial ₹525 crore, with an optional further ₹275 crore (total up to ₹800 crore) tied to business milestones and regulatory approvals, Arka said on 7 November 2026.
Who promotes Arka Fincap?
Arka Fincap is promoted by the Kirloskar Group through publicly listed Kirloskar Oil Engines Limited (KOEL).
What will the capital be used for?
Growth capital for secured retail lending (including vehicle finance and secured MSME loans), wider geographical presence, and stronger technology and risk management capabilities.
Featured image: Kirloskar technicians assembling an industrial engine on the factory floor. Photo: Kirloskar / Autocar Professional (deal coverage).
