New Delhi, April 27 -- Private equity firm Kedaara Capital is investing Rs 750 crore ($79.6 million) in Axis Finance Ltd, in a transaction that values the non-banking finance company around Rs 14,764 crore ($1.57 billion) on a post-money basis.

Kedaara's investment, via a preferential allotment, will be in addition to the Rs 1,500 crore that the NBFC is raising via a rights issue from its Mumbai-listed parent company Axis Bank, according to a press release.

The PE firm is investing in the NBFC via its fourth fund and will pick up a 5.08% stake in the company. Kedaara closed its fourth fund in April 2024 after securing $1.74 billion in what was then the largest PE vehicle raised in India. It was eclipsed by ChrysCapital late last year, which raised $2.2 billion for its 10th PE fund.

Axis Finance joins Kedaara's financial services portfolio that also includes non-bank lenders Avanse Financial Services Ltd, Veritas Finance and Spandana Sphoorty as well as fintech companies Juspay and Perfios.

The Axis Bank unit said the fresh fund infusion will boost its capital base, and improve its Tier 1 capital and capital adequacy ratio. The investment is subject to regulatory approvals.

"It (capital infusion) positions the company to pursue sustainable growth with prudence, while building a leading, diversified non-bank lending franchise in India," said Amitabh Chaudhry, managing director and chief executive officer at Axis Bank.

Sunish Sharma, founder and managing partner at Kedaara Capital, said the lender has a diversified presence across retail, MSME, and wholesale lending, and that it was "uniquely positioned" to capitalise on growth opportunities emerging in India's credit market.

Axis Finance's profit after tax grew 19% to Rs 806 crore for FY26. Its net non-performing asset ratio was 0.36% at the end of March compared with 0.37% the previous year.

Veritas Legal was the advisor to Kedaara Capital on the transaction. Morgan Stanley, Axis Capital and Cyril Amarchand Mangaldas advised Axis Finance.

Published by HT Digital Content Services with permission from VC Circle.