Arka Fincap has signed a deal for an initial investment of about $55.9 million from TPG’s The Rise Funds as the Indian lender shifts toward secured retail loans. The November 6 agreement remains subject to closing conditions, according to a filing by parent Kirloskar Oil Engines.
The nonbank lender finances used vehicles and provides property-backed loans to small businesses, alongside wholesale lending to corporate clients. It reports about $852 million in assets under management, including a secured retail portfolio exceeding roughly $106 million, and 146 branches across 10 states.
Arka previously concentrated on wholesale and larger small-business loans. Crisil Ratings’ October 6 assessment said it began its retail shift in the fiscal year ended March 2026 and discontinued unsecured small-business lending after elevated delinquencies.
The deal includes a possible second investment of about $29.3 million, dependent on agreed business milestones and regulatory approvals. Arka plans to use the capital to expand its reach and invest in technology and risk management. Figures are in US dollars, converted at November 6, 2026 reference rates.
Kirloskar Oil Engines would retain a majority interest: its stake through Arka Financial Holdings would fall from 90.3% to 68.6% on a fully diluted basis after the first tranche. TPG would gain the right to appoint one Arka director.
Expansion has already weighed on earnings. Crisil reported that Arka’s return on managed assets fell to 0.8% in the fiscal year ended March 2026 from 1.2% a year earlier, primarily because branch growth raised operating expenses. The agency said the new retail loan book was too young for its credit performance to be established.