KKR & Co. Inc.

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Bullish +75

KKR-backed InCred Holdings files updated draft IPO papers; valuation may touch β‚Ή15,000 crore

AI-generated analysis

πŸš€ KKR-backed InCred Holdings has filed an updated draft red herring prospectus (DRHP) with SEBI for its IPO.

πŸ’° The offering includes a fresh equity issue of β‚Ή1,250 crore plus an offer for sale of up to 99 million shares from existing investors.

πŸ“ˆ Valuation may reach β‚Ή15,000 crore if the pre-IPO fundraise option is exercised at a level equivalent to 20% of the fresh issue.

🏦 Net proceeds will primarily strengthen InCred Finance's tier-I capital base to support further lending activities.

πŸ‘¨β€πŸ’Ό The company was founded in 2017 by former Deutsche Bank executive Bhupinder Singh and is now a holding company for its finance arm.

🀝 Major shareholders include KKR India Financial Investments Pte, MNI Ventures, MEMG Family Office LLP, and V'Ocean Investments Ltd.

πŸ“Š As of December 31, 2025, the firm reported assets under management of β‚Ή14,448 crore with a net profit of β‚Ή290 crore in the preceding nine months.

πŸ“ˆ Between FY2023 and FY2025, net profit grew at an impressive CAGR of 84.97% while AUM expanded at 44.04%.

βš–οΈ Portfolio yields stood at 18.39% against a cost of borrowings of 10.05%, maintaining healthy spreads.

⚠️ Gross non-performing assets (stage 3 loans) rose slightly to 2.28% as of December-end compared to 2.05% the previous year.

πŸ›‘ The company maintains a robust capital adequacy ratio of 24.97%, significantly above the regulatory requirement of 15%.

πŸ… Crisil and Icra have assigned InCred an AA-/stable credit rating, reflecting its strong financial standing.

πŸ‘¨β€πŸ’Ό Lead bankers for the IPO include IIFL Capital Services, Kotak Mahindra Capital, Nomura Financial Advisory, and UBS Securities.

πŸ“‰ The filing arrives as several shadow lender peers face stalled IPOs due to sectoral challenges and rising bad loans.

🚦 Aye Finance Ltd recently listed at par despite a sluggish market debut for mid-sized NBFCs in the recent months.

πŸ”Ž InCred operates independently from its other group verticals such as InCred Capital and InCred Money.

🏒 The firm is registered as a merchant banker with SEBI and manages a registered alternative investment fund.

Bullish Signals
  • KKR-backed InCred Holdings is seeking a valuation of up to β‚Ή15,000 crore with an IPO size likely around β‚Ή3,000 crore, indicating strong institutional confidence in its growth prospects.
  • The company has demonstrated exceptional performance as the fastest-growing diversified NBFC in India between fiscal years 2023 and 2025, with net profit growing at a CAGR of 84.97% and assets under management increasing at a CAGR of 44.04%.
  • InCred Finance reported a portfolio yield of 18.39% against an average cost of borrowings of 10.05%, creating healthy spreads that drive profitability.
  • The company's capital adequacy ratio stands at a robust 24.97%, significantly higher than the regulatory requirement of 15%, providing ample buffer for onward lending and expansion.
  • Crisil Ratings and Icra have assigned the company an AA-/stable rating, reflecting strong creditworthiness compared to other shadow lenders facing stalled IPOs.
  • InCred Holdings has secured backing from top-tier institutional investors including KKR India Financial Investments, MNI Ventures, MEMG Family Office LLP, and V'Ocean Investments Ltd.
Risk Factors
  • Several prominent shadow lenders, including Veritas Finance Ltd, Hero FinCorp, SK Finance, Belstar Microfinance, Avanse Financial, and Credila Financial Services, have stalled their IPO processes amid sectoral pain and rising bad loans.
  • The recent listing of Aye Finance Ltd in February saw a lacklustre debut with shares trading at par to the issue price of β‚Ή129 per share, reflecting subdued market sentiment in the NBFC sector.
  • Asset quality metrics show gross stage 3 loans (non-performing assets) at 2.28% as of December-end 2025, which is up from 2.05% a year earlier, indicating deteriorating loan performance.
  • The company reported a credit cost of 1.74% for the year ended March 31, 2025, signaling ongoing issues with bad debt provisioning.
Full Analysis
KKR-backed InCred Holdings Ltd has filed an updated draft red herring prospectus (DRHP) with India's securities regulator, SEBI, indicating it is moving forward with its initial public offering. The company plans to raise approximately β‚Ή3,000 crore through a fresh equity issue of β‚Ή1,250 crore and an offer for sale of up to 99 million shares from existing investors like KKR India Financial Investments Pte, MNI Ventures, MEMG Family Office LLP, and V’Ocean Investments Ltd. The transaction would value the firm at up to β‚Ή15,000 crore, with the possibility of raising an additional β‚Ή250 crore via a pre-IPO fundraise if investors participate. InCred Finance, the operating subsidiary and a tier-I merchant banker by SEBI registration, specializes in retail-focused credit products as a middle-layer Non-Banking Financial Company (NBFC). Founded in 2017 by former Deutsche Bank executive Bhupinder Singh, the company reported assets under management of β‚Ή14,448 crore as of December 31, 2025, making it the fastest-growing diversified NBFC in India between fiscal years 2023 and 2025. Financial metrics for the nine months ended December 2025 showed a net profit of β‚Ή290 crore against total disbursements of β‚Ή6,683 crore, with portfolio yields at 18.39% on average borrowings costs of 10.05%. The company holds a capital adequacy ratio of 24.97%, significantly above the regulatory requirement of 15%, and maintains asset quality with gross non-performing assets (stage 3 loans) at 2.28% as of December-end, which is up from 2.05% the previous year. Crisil Ratings and ICRA have assigned the company an AA-/stable rating. The IPO is being underwritten by IIFL Capital Services Ltd., Kotak Mahindra Capital Co., Nomura Financial Advisory, and UBS Securities India Pvt., with net proceeds intended to strengthen tier-I capital and support onward lending.