Arka Fincap Limited: Comprehensive Company Profile

Background

Arka Fincap Limited is a non-deposit-taking, non-banking financial company (NBFC) headquartered in Mumbai, India. Established on April 20, 2018, as Kirloskar Capital Limited, the company rebranded to its current name on June 28, 2019. As a subsidiary of Kirloskar Oil Engines Limited (KOEL), Arka Fincap leverages the robust legacy and financial strength of the Kirloskar Group. The company's mission is to provide technology-enabled, innovative, and customized financial solutions, aiming to enable growth and fulfill the aspirations of its customers through empathy and agility.

Key Strategic Focus

Arka Fincap's strategic focus encompasses four principal lines of business:

1. Corporate Lending: Offering secured loans to companies in manufacturing, services, and infrastructure sectors, including structured financing, promoter financing, and special situation funding.

2. Real Estate and Urban Infrastructure Financing: Providing project-specific funding for residential and commercial projects, including last-mile financing, project finance, corporate exposures, working capital finance, and acquisition financing.

3. MSME Lending: Launched in December 2020, this segment offers products such as Loan Against Property, Supply Chain Finance, and Unsecured Loans through digital lending platforms.

4. Personal Finance Loans: Initiated in August 2020, this segment provides short-term personal finance loans to individual customers.

As of December 2022, the loan book distribution was as follows:

Corporate Lending: ₹1,51,776.91 lakhs (44.78%)

Real Estate and Urban Infrastructure Financing: ₹1,09,057.82 lakhs (32.18%)

MSME Lending: ₹72,443.67 lakhs (21.37%)

Personal Finance Loans: ₹5,653.87 lakhs (1.67%)

Financials and Funding

Arka Fincap has demonstrated robust financial performance:

Assets Under Management (AUM): As of March 31, 2024, AUM stood at ₹5,210.41 crores, with retail AUM surpassing 50%.

Capital Adequacy: The Capital to Risk-Weighted Assets Ratio (CRAR) was 25.09% as of March 31, 2024, well above regulatory requirements.

Non-Convertible Debentures (NCDs): In December 2023, Arka Fincap issued secured, rated, listed, redeemable NCDs with a base issue size of ₹150 crores and an option to retain oversubscription up to ₹150 crores, aggregating up to ₹300 crores. The NCDs were rated "CRISIL AA-/Positive" by CRISIL Ratings Limited.

Technological Platform and Innovation

Arka Fincap emphasizes a customer-centric, digitally enabled approach. The company utilizes robust technology platforms to offer customized financial solutions, ensuring agility and responsiveness to customer needs. This digital orientation enhances operational efficiency and customer experience.

Leadership Team

Arka Fincap's leadership comprises experienced professionals:

Nasser Munjee: Chairman, Independent Director

Samrat Gupta: Managing Director

Gauri Kirloskar: Non-Executive Director

Mahesh Chhabria: Non-Executive Director

Vimal Bhandari: Non-Executive Non-Independent Director

Dhanushkodi Sivanandhan: Independent Director

Vijay Chugh: Independent Director

Yogesh Kapur: Independent Director

R. Gurumurthy: Independent Director

Hoshang Sinor: Independent Director

Rahul Bhagat: Independent Director

Competitor Profile

Market Insights and Dynamics

The NBFC sector in India is characterized by significant growth potential, driven by increasing demand for credit across various segments, including corporate, real estate, MSME, and personal finance. The market is competitive, with numerous players offering diverse financial products.

Competitor Analysis

Key competitors include:

SBI Cards and Payment Services Limited: Established in 1998, with a paid-up capital of ₹951.08 crores, focusing on credit card services.

BOBCARD Limited: Formed in 1994, with a paid-up capital of ₹975.00 crores, offering credit card and payment solutions.

Infrastructure Leasing and Financial Services Limited (IL&FS): Established in 1987, with a paid-up capital of ₹983.15 crores, engaged in infrastructure financing and development.

Strategic Collaborations and Partnerships

Arka Fincap has established strategic partnerships to enhance its market position and service offerings. The company has tie-ups with four fintech companies and two NBFCs for co-lending, expanding its reach and capabilities in the financial services sector.

Operational Insights

Arka Fincap's strategic considerations include:

Diversified Loan Portfolio: Balancing exposure across corporate, real estate, MSME, and personal finance segments to mitigate risks.

Geographical Expansion: Operating across 32 branches in 11 states, including Maharashtra, Karnataka, Delhi, Tamil Nadu, Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Andhra Pradesh, Telangana, and Gujarat, to tap into diverse markets.