ADIA picks minority stake in KKR India Financial Services

This is Abu Dhabi Investment Authority fourth investment in the Indian financial space

Global investment firm KKR today announced that an entity wholly-owned by the Abu Dhabi Investment Authority (ADIA) has become a significant minority shareholder in KKR India Financial Services (KIFS), an alternative credit business in India. The NBFC leverages KKR's balance sheet and investment expertise to extend financing solutions to corporations and mid-sized enterprises with long-term capital needs across the country. The financial details of the transaction were not disclosed.

This is ADIA's fourth investment in the financial space. Before this, it had invested in HDFC Bank, Kotak Mahindra Bank and Reliance Capital. For KKR, the part-divestment from the NBFC business follows a series of exits over the last year or so that includes Alliance Tire Group, Gland Pharma, TVS Logistics and Aricent last week.  

B V Krishnan, Member at KKR and CEO of KIFS, said, “India continues to be an under-served financial services market, with shallow capital markets and an over-reliance on banks for wholesale financing. KIFS has consistently provided flexible credit financing solutions to companies and shareholders, keeping in mind their long-term objectives for their business. ADIA’s investment in KIFS gives us a high-calibre partner to work alongside as we further scale our platform and deliver creative solutions in the market.”

Hamad Shahwan Al Dhaheri, Executive Director of the Private Equities Department at ADIA, said: “India is one of the world’s fastest growing and most dynamic markets, and Indian businesses are increasingly seeking alternative credit solutions. KIFS has played an integral role in the development of this important form of financing in India and, through our investment in the company, we look forward to supporting the continued evolution of the market. Becoming a shareholder in KIFS is also consistent with ADIA’s approach of seeking principal investments in market-leading businesses alongside strong and high-quality partners.”  

KIFS has established a market-leading position in India’s structured credit space, having extended approximately $4 billion of financing to companies over the past eight years. KIFS’ business combines KKR track record and expertise in credit, capital markets and asset management to originate and execute on differentiated transactions across industries and sectors. In 2017, KIFS further enhanced its focus on mid-market opportunities to provide a wider range of companies with the necessary financing for the success of their long-term business.

KKR has two NBFC business in India. KIFS was the first NBFC it set up in 2009. It lends to mid-market companies across sectors, excluding real estate. In 2015, KKR floated a second NBFC, KKR India Asset Finance Pvt. Ltd, to lend to the real estate sector. The same year, this NBFC received investment from Singapore sovereign wealth fund GIC and Townsend Group. Last year, it bought a majority stake in Avendus Capital, which also has a debt business.

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit and, through its strategic manager partnerships, hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside its partners' capital and provides financing solutions and investment opportunities through its capital markets business. References to KKR's investments may include the activities of its sponsored funds.