InCred Financial aims for a Diwali ’25 IPO

InCred Financial Services Ltd aims to raise ₹4,000-5,000 crore ($471-588 million) in an initial public offering late next year, less than two years after the KKR-backed fintech startup earned its unicorn stripes, two people familiar with its plans told Mint.

The issue is expected to be valued at ₹15,000-22,500 crore ($1.78-2.6 billion), one of them said, adding that InCred will shortly finalise merchant bankers to manage its IPO.

“The company aims to appoint four banks by January and wants to launch a Diwali 2025 initial public offering,” this person said.

InCred declined to comment on its IPO plans.

The company entered the coveted unicorn club—startups estimated to be worth at least $1 billion—in December last year, when it raised $60 million from investors.

Ranjan Pai, chairman of Manipal Education and Medical Group, invested $9 million in InCred while Ravi Pillai, chairman of RP Group of Companies, infused $5.4 million into the venture. Additionally, Ram Nayak, global co-head of Deutsche Bank, invested $1.2 million.

With the Reserve Bank of India highlighting possible stress in non-banking financial companies, there is a growing need for capital in the sector, said Arka Mookerjee, partner at law firm J. Sagar Associates. Accessing public capital via IPOs would allow NBFCs to build a capital base for the immediate future as well as for growth, he added. 

Also read | MobiKwik’s IPO: Is this the start of something bigger?

The KKR clause

InCred’s IPO is expected include an offer for sale (OFS) component, allowing its promoters to sell their stake in the company, according to the people mentioned earlier.

In September, InCred’s group chief executive officer Bhupinder Singh said the company would go public once global private equity firm KKR, which owns a 13.4% stake, agrees to sell its holding during the IPO. InCred Finance and KKR India Financial Services had merged in 2022 to create a joint entity under the brand name InCred Financial Services.

Read also | KKR backed InCred Financial plans to list in 1-2 years

Singh, who was previously co-head of banking and markets for Asia Pacific at Deutsche Bank, started InCred Finance in 2017. He is the largest individual shareholder in the company with an 18.9% stake. Other major shareholders include Pai (10.7%), Teacher Retirement System of Texas (9%), and OAKS Asset Management (7%).

In a span of six years, the non-banking financial company has grown its assets under management to nearly ₹10,000 crore, with a focus on personal, education and small business loans.

InCred also operates a lending business (InCred Finance), an institutional, wealth and asset management platform (InCred Capital), and a digital investment distribution platform (InCred Money).

The company has also been in talks to set up a general insurance joint venture with a foreign partner and launch a mutual fund house as it aims to build a diversified financial services company across lending, asset management, wealth and other segments, Singh told Mint in November.

InCred’s operating revenue in 2023-24 jumped to ₹1,270 crore from ₹864.6 crore in the year prior, while net profit surged to ₹316.3 crore from ₹120.9 crore.

Also read | InCred plans insurance, mutual fund arms as it seeks to diversify offerings