Andhra-based Kanakadurga Finance is in talks with private equity investors to raise Rs 100-125 crore (around $11.9-14.9 million) in equity capital, and has appointed consulting and advisory firm Intellecap for the series B round.
The company did not disclose which PE firms are in the fray and VCCircle was unable to immediately ascertain the same.
Kanakadurga focusses on the used commercial vehicle financing across semi-urban and rural geographies.
It also offers gold loans. Started in Vijayawada, the company has 154 branches across six states and one union territory. The company is expected to end the current financial year with an asset under management of over Rs 800 crore.
The company is promoted by Sandireddy Lakshmi Narayana, who has over 30 years of experience in the vehicle finance industry. The day-to-day operations are managed by his sons, Jayaprakash Narayana Chowdary and S Sriman Narayana.
In 2017, BanyanTree Growth Capital Fund invested in the non-bank lender. Currently, it has an around 28% stake in the company.
In a recent note, CareEdge Ratings said that experienced promoters, diversified product suite, and comfortable capitalisation levels work in the company’s favour. However, around 85% of the assets under management is comprised in south India, and this presents a concentration risk.