Ontario Teachers’ Pension Plan Invests in Growing Indian NBFC Kogta Financial

Kogta Financial
Preeti Bali / 6:16 am / June 27, 2024

The Ontario Teachers’ Pension Plan Board (Ontario Teachers’) has made a significant investment in Kogta Financial (India), a non-banking financial company (NBFC) specializing in secured vehicle and micro, small, and medium enterprise (MSME) loans. The investment of ₹1,230 crore ($148 million) grants Ontario Teachers’ a notable, but not controlling, ownership stake in Kogta.

Funds to Fuel Growth

This transaction allows Kogta’s existing institutional investors, Morgan Stanley and Creador, to partially exit their holdings. The capital infusion from Ontario Teachers’ will be used by Kogta to expand its product offerings and establish a wider regional presence. Kotak Investment Banking served as the financial advisor for this deal.

Serving Underserved Markets

Laid out in Rajasthan in 1996, Kogta takes care of the broad and underbanked market for vehicle funding and MSME credits. With over ₹4,800 crore in resources under administration, Kogta offers advances for business vehicles, traveler vehicles, farm haulers, development hardware, and MSME adventures.

Strategic Partnership

“Ontario Educators’ tremendous experience will be priceless as Kogta sets out on its next period of development,” said Arun Kogta, Kogta’s Overseeing Chief and President. “Their skill will be instrumental in broadening our arrive at across designated districts and item fragments.”

As a component of the understanding, Rahul Mukim, Overseer of Private Capital for Ontario Educators’ in India, will join Kogta’s directorate.


Alignment with Investment Strategy

“Financial services, particularly the non-banking lending sector, are key areas of focus for us globally, and we possess significant expertise in these fields,” commented Cindy Yan, Senior Managing Director of Private Capital for Ontario Teachers’ in Asia-Pacific. “This investment aligns perfectly with our strategy of supporting strong management teams in high-growth businesses with a clear competitive edge.”

Rising Investor Interest in Indian NBFCs

Ontario Teachers’ investment in Kogta reflects the growing interest of investors in India’s NBFC sector. Recent examples include Arthan Finance, a lender focused on self-employed nano and micro-entrepreneurs, securing $6 million from investors like Incofin India Progress Fund and the Michael and Susan Dell Foundation. Additionally, Propelld, a fintech company specializing in education, raised $25 million in debt financing for its NBFC unit, Edgro. Furthermore, the International Finance Corporation (IFC) has proposed a potential investment of up to $60 million in Five Star Business Finance (Five Star).

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