Funding
Kirloskar Oil Engines Board Approves TPG's ₹525 Crore Initial Investment in Arka Fincap
By News Desk ·
Key takeaways
- Kirloskar Oil Engines approved a ₹525 crore initial TPG investment in Arka Fincap, with a potential ₹275 crore second tranche subject to milestones.
- KOEL's effective holding in Arka Fincap will dilute from 90.279% to 68.587% after the first tranche and to 62.607% after the second.
- Arka Fincap manages about ₹8,000 crore in assets under management, with a secured retail portfolio exceeding ₹1,000 crore across 146 branches in ten states.
Kirloskar Oil Engines has approved a ₹525 crore initial investment by TPG in its step-down subsidiary Arka Fincap, with a potential second tranche of ₹275 crore subject to milestones. ScanX reported that the shareholders' agreement was signed on November 6, 2026, after a board meeting that concluded at 4:10 pm.
How the TPG Investment in Arka Fincap Is Structured
The transaction runs through a Securities Subscription Agreement between Arka Fincap and TPG, covering equity shares and compulsorily convertible preference shares in two tranches. The first tranche of ₹525 crore is tied to the completion of conditions precedent. The second tranche of ₹275 crore depends on business milestones and regulatory approval.
KOEL's effective holding in Arka Fincap will dilute from 90.279% to 68.587% on a fully diluted basis after the first tranche, and to 62.607% after the second. KOEL retains majority control, and the agreement states there is no impact on the management or control of Kirloskar Oil Engines itself.
TPG's The Rise Funds are investing to support Arka's transition into a diversified, secured retail-led financial institution. TPG gains the right to appoint one nominee director to Arka's board, alongside minority protection rights and reserved matters. Arka Fincap manages assets under management of approximately ₹8,000 crore, with a secured retail portfolio exceeding ₹1,000 crore, and operates through 146 branches across ten states.
Avendus Capital was the exclusive financial advisor to Arka, with AZB & Partners as legal counsel. Cyril Amarchand Mangaldas advised TPG. Arka Fincap is rated CRISIL AA/Stable.
Kirloskar Oil Engines' Recent Moves
According to akta.pro company records, Kirloskar Oil Engines reported FY26 revenue of Rs 7,701 crore, up 21% year-on-year, and a net cash position of Rs 552 crore. In June 2026 the company secured a 192 MW order from HyperNext for 96 units of 2,500 kVA Optiprime Dual Core power systems at India's first 800VDC hyperscale AI data centre.
| Record | Figure |
|---|---|
| FY26 revenue | Rs 7,701 crore, up 21% year-on-year |
| FY26 profit after tax | Rs 562 crore, up 18% |
| Net cash position | Rs 552 crore |
Earlier Kirloskar Oil Engines Announcements
On September 2, 2026, Kirloskar Oil Engines signed a strategic partnership with DEUTZ on a 1.6-litre R550 engine platform delivering 18 to 41.2 kW and meeting EU Stage V and US EPA/CARB Tier 4 emissions standards, ScanX reported. On September 3, 2026, Business Standard reported that the two companies agreed on a strategic cooperation to expand compact engine solutions across Europe and North America.
On October 28, 2026, Business Today reported that Gauri Kirloskar, managing director of Kirloskar Oil Engines, aims to double revenues across listed Kirloskar Group companies to $5 billion by 2030, including NBFC and real estate.
Arka Fincap's Second Tranche Conditions
The second tranche of ₹275 crore is subject to business milestones and regulatory approval, following completion of the conditions precedent for the first tranche.