Mid-market focused Arka Investment Advisory has announced the first close of its Rs 250 crore debt fund after receiving commitments of Rs 55 crore from promoters.
Arka Credit Fund I, a category-II alternate investment fund (AIF) - with a tenure of four-and-half years - also has a green shoe option of Rs 50 crore over and above the targeted corpus.
“We are planning to make 8-10 investments at a ticket size between Rs 30-50 crore in performing credit space at an internal revenue rate (IRR) of 14-16%. Our maiden offering has strong backing from our sponsors and so far, Arka Credit Fund I has received an encouraging response from marquee investors,” said Sonit Singh, director and head, Arka Investment Advisory Services Pvt Ltd.
The Arka Credit Fund I will back mid-market corporates and conglomerates to support their business needs. It claims to have a management team with a cumulative experience of over 100 years in managing assets in the performing credit and structured credit space.
“The Asset management business rollout is a well-thought-out diversification strategy of the group in alignment with our NBFC business, Arka Fincap Ltd,” said Gauri Kirloskar, managing director, Kirloskar Oil Engines Limited.
Arka Investment Advisory Services is an arm of a non-banking financial company (NBFC) Arka Financial Holdings Pvt Ltd., which is in turn is a wholly owned subsidiary of Kirloskar Oil Engines Ltd.
Founded in 2018, Arka Fincap is an RBI-licensed company which provides secured and unsecured financing solutions to MSMEs (micro, small and medium enterprises), SMEs, developers, and corporates. It provides capital access to restaurants, retailers, designers, cement, warehouses, logistics, automobile, and chemical firms among others.
“The fund shall complement the NBFC in providing a more comprehensive solution to our clients,” Vimal Bhandari, executive vice chairman and chief executive officer, Arka Fincap Limited.
As of September 2022, Arka has a borrowing of Rs 2265 crore from public sector units (PSUs), large private banks, small finance banks, fund houses and others. The AUM (assets under management) stands at Rs 2851 crore. It is currently present in 14 cities across West, South and North regions in India and has over 140 employees across all branches.
