Arka Fincap Secures Major Strategic Investment from TPG

KIRLOSENG DHARMESH BHATT (Research Analyst) SEBI Registration No. INH000009685 Arka Fincap Limited ("Arka"), a non-banking financial company (NBFC) promoted by the Kirloskar Group through Kirloskar Oil Engines Limited (KOEL), has entered into definitive agreements and a Shareholders' Agreement (SHA) with TPG SG Arca Pte. Ltd. and Arka Financial Holdings Private Limited (AFHPL). ---- Key Highlights of the Investment ---- Total Investment Structure: Tranche 1: Initial subscription of 100 equity shares and 32,53,45,231 compulsorily convertible preference shares for an aggregate consideration of ₹525 crore. Tranche 2: Potential subsequent investment of 12,93,34,496 compulsorily convertible preference shares for an aggregate consideration of ₹275 crore, subject to achieving agreed business milestones and regulatory approvals. Shareholding Changes:KOEL currently holds a 100% equity stake in AFHPL, which in turn holds a 90.279% equity stake in AFL on a fully diluted basis. Post-Tranche 1, KOEL's indirect shareholding through AFHPL will adjust to 68.587%. Post-Tranche 2, KOEL's indirect shareholding will be 62.607%. Business Scale & Footprint: Arka currently manages an Assets Under Management (AUM) of approximately ₹8,000 crore, with a secured retail portfolio exceeding ₹1,000 crore. The company operates a network of 146 branches across ten states backed by over 2,000 employees. Governance & Business Scope: The agreement includes customary governance provisions, minority protection rights, and the right for TPG to appoint one nominee director. Additionally, KOEL and its affiliates have agreed that their group NBFC lending business will be carried on exclusively through Arka. Disclosure /Disclaimer Link: *****