Arka Fincap has signed definitive agreements with TPG’s The Rise Funds for an initial investment of Rs 525 crore, with a further Rs 275 crore to follow in a second tranche.
Kirloskar Oil Engines, the listed parent of Arka, said its board approved the deal on 6 November and the agreements were executed the same day. The investment will support Arka’s growth as a secured retail lender.
The money is earmarked for expanding Arka’s retail lending franchise, while the company keeps building on its established wholesale lending platform. Technology and risk management will also get a share of the new capital.
How the two tranches work
In the first tranche, TPG will subscribe to compulsorily convertible preference shares worth Rs 525 crore. The second tranche of Rs 275 crore will follow only if Arka meets agreed business milestones and secures the required regulatory approvals.
Kirloskar Oil Engines currently holds an effective 90.279 percent stake in Arka through Arka Financial Holdings. That stake will fall to 68.587 percent after the first tranche and to 62.607 percent after the second, on a fully diluted basis.
The shareholders agreement between the parties becomes operative when TPG completes its subscription to the first tranche. The filing states that the agreement gives TPG no rights over the board, management or shares of Kirloskar Oil Engines itself.
A lender built around small borrowers
Arka was founded in 2018 as a subsidiary of Kirloskar Oil Engines, a group with a history stretching back more than 130 years. It is an RBI licensed non banking financial company with a CRISIL rating of AA for long term borrowings.
The lender now manages assets of about Rs 8,000 crore across 146 branches in ten states, with more than 2,000 employees. Its secured retail assets have crossed Rs 1,000 crore, a mark its management calls a defining step in its shift towards granular retail lending.
Arka lends across pre-owned vehicle loans, secured business loans, loans against property and wholesale lending. As of March 2025, retail loans made up more than 64 percent of its Rs 7,256 crore of assets, with a capital adequacy ratio of 20.8 percent.
The team leading the next phase
Samrat Gupta has led Arka as managing director since October 2024. He previously served as managing director and chief executive of Tata Motors Finance, and he took over from founder chief executive Vimal Bhandari, who moved to a non executive role on the board.
“As a Group, we have always placed great value on enduring partnerships and the institution-building ethos of creating businesses that stand the test of time. We seek partners who share this philosophy, and we see a strong alignment with TPG’s approach.”
Gauri Kirloskar, Vice Chairperson and Managing Director, Kirloskar Oil Engines
Gupta said resilient financial institutions are built on capital anchored in character, customer service and tech led credit discipline. He added that crossing Rs 1,000 crore in secured retail assets marks a defining milestone in Arka’s ambition to build a future ready financial enterprise.
Why this corner of lending matters
“Many of India’s MSMEs and vehicle operators remain underserved by formal financial services, and Arka has built a disciplined, secured retail lending platform to serve these customers, with the potential to reach even more customers at scale.”
Simit Batra, Business Unit Partner, TPG
The gap Batra points to is large. A World Bank feature published in October 2026 puts India’s MSME financing gap at $333 billion, and it notes that private capital is now being channelled to close it.
TPG manages $346 billion in assets as of 30 September 2026, and its impact platform alone accounts for $37 billion. The Rise Funds back growth stage businesses that pair measurable impact with financial returns.
Finance for smaller institutions was also in focus closer to home this week. OneStack raised Rs 12.5 crore to help cooperative banks run UPI on their own handles, another sign of capital flowing towards the rails that serve small borrowers.
One caution sits inside the headline number. Only the first Rs 525 crore is committed now, and the remaining Rs 275 crore depends on milestones and approvals. The full Rs 800 crore is therefore a plan with conditions attached, not money already in the bank.
