A year after entering into talks for a partnership, KKR’s non-bank lending business, KKR India Financial Services (KIFS) and InCred Financial Services, the retail and MSME lending business of InCred, have inked a deal to merge the two lending businesses.
Founded in 2016 by Bhupinder Singh, InCred Finance is a tech-enabled lending institution that spans online and offline models across consumer, small businesses, and education lending. KIFS, which was founded in 2009, provides Indian businesses with financing solutions.
Under the terms of the agreement, InCred’s retail non-banking finance business and KIFS will be combined to form InCred Finance, which will be led by CEO Bhupinder Singh.
A consortium consisting of Singh, as well as existing InCred investors, will own a majority stake in InCred Finance. A consortium led by KKR and comprising existing investors in KIFS will retain a significant minority stake. KKR will be the single largest investor in InCred Finance at the time of the transaction’s close and will remain a long-term strategic partner to the business.
InCred’s equity investors include former Deutsche Bank co-CEO Anshu Jain, Ranjan Pai of Manipal Group, OAKS Asset Management, Investcorp, FMO, Moore Capital and Elevar.
The transaction is not a monetization event for investors of InCred, KIFS or KKR, the two companies said. InCred Finance will be a strategic investment for KKR and will not be a portfolio company in a KKR fund. It will operate independently of KKR.
InCred Finance will have an equity base of $300 million and a balance sheet of $750 million.
