SK Finance Plans $250-300 Million IPO in 2024 Backed by TPG & Norwest Ventures

Jaipur-based non-banking finance company (NBFC), SK Finance, with a history stretching over 28 years, is gearing up for a significant move in the financial markets. Established in 1994, the company, previously known as Ess Kay Fincorp, has initiated preliminary discussions to launch an initial public offering (IPO) in 2024. The aim is to raise an estimated $250 million to $300 million (approximately Rs 2,092 crore to Rs 2,511 crore), according to sources close to the matter who spoke to Moneycontrol.

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SK Finance, notable for its presence in the used vehicle finance segment, has garnered support from prominent backers such as TPG Growth and Norwest Venture Partners, and has recently welcomed Motilal Oswal Alternates into its fold.

According to an insider, the IPO is seen as a strategic move to unlock value and provide a partial exit for investors, while also raising capital for future growth. The IPO is expected to be a mix of primary and secondary share issues. While a pre-IPO round is being considered, there has been no final decision on this yet.

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Despite attempts to contact them, TPG, SK Finance, and Norwest Venture Partners have not provided comments on the matter.

SK Finance boasts a substantial customer base of over 9.3 lakh and a workforce of more than 9,500 employees. It operates across 12 states and 1 union territory in India, with over 490 branches. As of June 30, 2023, the company had an Asset Under Management (AUM) of Rs 7,937 crore and reported a profit after tax (PAT) of Rs 61 crore for the quarter ending June 30, 2023.

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This IPO plan comes amidst a flurry of activity in the NBFC sector. Recent listings include Federal Bank’s subsidiary FedBank Financial Services and SBFC Finance, which had a strong debut on Dalal Street. Other financial services firms like Hero FinCorp and Avanse Financial Services are also preparing for public issues in the near future, signaling a robust interest in the sector.

The IPO of SK Finance is poised to add another notable chapter to the evolving narrative of India’s NBFC sector and its appeal to investors.

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