The Ontario Teachers’ Pension Plan Board has acquired a significant minority stake in Kogta Financial (India), a focused non-banking financial company (NBFC) specialising in the secured vehicle and MSME financing space, for Rs 1,230 crore ($148 million).
The transaction also provides partial exits to Kogta’s existing institutional investors Morgan Stanley and Creador.
Kogta aims to use the funds to drive growth across its product offering and expand its regional presence.
Kotak Investment Banking served as the financial advisor for the transaction.
Started in Rajasthan in 1996, Kogta focuses on the large and underserved vehicle finance and MSME loan market. It has assets under management of ~Rs 4,800 crore across commercial vehicles, passenger vehicles, tractors, construction equipment, and MSME loans.
“Their (Ontario Teachers’) experience would help Kogta navigate the next phase of its growth journey, deepening its reach across chosen geographies and product segments,” Arun Kogta, MD and CEO of Kogta, said.
As part of the investment, Rahul Mukim, Director of Private Capital, India, is slated to join the board of Kogta as the nominee for Ontario Teachers’ Pension Plan.
“Financial services and non-banking lending financial services are global focus sectors where we have significant expertise. This investment aligns with our strategy of supporting strong management teams in high-growth businesses with a clear competitive advantage,” said Cindy Yan, Senior Managing Director, Private Capital, Asia-Pacific, at Ontario Teachers’.
Ontario Teachers’ investment in Kogta comes amid a rise in investor interest in NBFCs in India.
Recently, Arthan Finance, specialising in loans for self-employed nano and micro entrepreneurs, raised about $6 million from investors such as Incofin India Progress Fund and the Michael and Susan Dell Foundation.
Last month, Propelld, an education-focused fintech firm, raised $25 million in debt investment for its licensed NBFC unit Edgro. Separately, the International Finance Corporation (IFC) has proposed to invest up to about $60 million in Five Star Business Finance (Five Star).
