Multiples PE leads $111-mn funding round in Kogta Financial

Kogta Financial (India) Limited (Kogta) said that Multiples Private Equity (Multiples) has signed definitive documents for leading an Rs 846 crore ($111 million) Series D round in the company, a fast-growing retail NBFC specialised in the secured retail vehicle and MSME financing space.

Canada Pension Plan Investment Board (CPP Investments) and existing investors, Morgan Stanley Private Equity Asia (Morgan Stanley), and Creador IV LP (Creador) also participated in this round. The funds will be used as primary capital to support Kogta’s continued rapid growth across products and regions and will also provide a full exit to Kogta’s first institutional investor in Series A, IIFL Seed Venture Fund (IIFL). Kotak Investment Banking was the exclusive financial advisor to the transaction.

“This is a significant milestone for the Company, and we are pleased to welcome aboard Multiples and CPP Investments. Their experience would help Kogta navigate the next phase of its growth journey, deepening its reach across chosen geographies and product segments,” said Arun Kogta, MD and CEO of Kogta. “We have grown our AUM (assets under management) 2x during the last 2 years despite Covid and we see a strong opportunity for the Company to grow further to Rs 5,000 crore in the next 2 years.”

Kogta focuses on the large and underserved used vehicle finance market and MSME loans. Started in Rajasthan, Kogta has now expanded across eight states with over 175 branches. The company has an AUM of over Rs 2,000 crore, across commercial vehicles, passenger vehicles, tractors, and MSME loans. “The large primary capital infusion will help enhance our balance sheet strength and increase the conviction of credit rating agencies and lenders in the Company,” said Varun Kogta, ED and CFO of Kogta.

Since the first institutional investment in Oct’16, Kogta has scaled rapidly at 50 per cent CAGR over the last few years, led by founders with strong on-ground operating experience and deep market knowledge. Over the years, the Company has brought in experienced professionals to scale the business, backed by a culture of “freedom to grow”, and system led meritocratic operations.

“Kogta’s in-house technology and systems enable it to deliver superior turnaround time (TAT) to customers, drive productivity, and build customer insights,” said Nithya Easwaran, Managing Director, Multiples. “We are delighted to partner with them to build a distinctive financial institution in livelihood financing for entrepreneurs across the country.”

Arjun Saigal, Managing Director, Morgan Stanley Private Equity Asia (MSPEA), said this is MSPEA’s third investment in Kogta and is a testament to its belief in the execution capabilities of the management team as well as the attractiveness of the vehicle finance space. “Kogta has scaled its operations to 8 states with a sharp focus on asset quality and with the new fund-raise we hope Kogta continues its solid performance,” said Saigal.

Robin Agarwal, Director at Creador, said that since its initial investment, Kogta has continued its industry-leading growth trajectory while effectively managing several macro disruptions. Agarwal said the management team’s deep understanding of its target customer segment, coupled with its investments in developing the franchise, allows the company to be well-poised for superior growth over the next few years. 

“Under the leadership of Arun (Kogta) and Varun (Kogta), the Company has exhibited profitable growth despite multiple headwinds. As we exit our investment, we remain confident that Kogta will continue to deliver high-quality growth,” said Amit Mehta, Principal at IIFL Asset Management Ltd.