ICRA

The Pink city-headquartered vehicle finance and business loans-focused non-bank lender SK Finance has filed preliminary papers with capital markets regulator Sebi to raise Rs 2,200 crore through an initial share sale.
The proposed initial public offer (IPO) is a combination of a fresh issue of equity shares worth Rs 500 crore and an offer for sale (OFS) of up to Rs 1,700 crore by promoters and investor shareholders, according to the draft red herring prospectus (DRHP) filed last week.

SK Finance files draft papers with Sebi to raise ₹2,200cr via IPO

Net profit of SK Finance rose 97.95% to Rs 83.00 crore in the quarter ended December 2023 as against Rs 41.93 crore during the previous quarter ended December 2022. Sales rose 37.79% to Rs 454.89 crore in the quarter ended December 2023 as against Rs 330.14 crore during the previous quarter ended December 2022.

SK Finance standalone net profit rises 97.95% in the December 2023 quarter

Jaipur-based SK Finance Ltd, a non-banking financial company, has reported a 27% rise in its loan book to ₹13,261 crore for FY25, compared to ₹10,476 crore in the previous year. Despite weathering industry headwinds in FY25, SK Finance stayed resilient, delivering an impressive performance backed by robust demand and focused expansion, according to its annual report. The NBFC saw its profit after tax increase by 21.72% year-on-year to ₹380 crore, while total income rose 32.7% to ₹2,386 crore.Disbursements during the year stood at ₹8,398 crore, marking a 16% rise, driven by growth in car, tractor and MSME lending. Commercial vehicle loans comprised the largest share of the company’s assets under management (AUM) at 37.9%, followed by MSME loans at 23.1% and car loans at 20.4%. SK Finance maintained a strong capital adequacy ratio of 29.51%, comfortably above regulatory requirements.

SK Finance loan book jumps 27% to ₹13,261 crore in FY25; eyes ₹2,200 crore via IPO

SKFL’s borrower base remains vulnerable, with 30+ dpd at 7.4% and 90+ dpd at 2.1% as of Dec 2024. GNPA rose to 4.3%, and provision cover improved to 2.2%. Controlling slippages amid growth will be key.


SKFL’s AUM reached ₹12,218 crore with presence in 12 states, though Rajasthan still contributes 49%. Vehicle loans form 76% of AUM, and MSME loans have grown to 24%, supporting gradual diversification.



The issuer has made timely interest payments.

Rajendra Kumar Setia, Managing Director &CEO

SKFL, led by Mr. Rajendra Setia, has 20+ years of experience in Rajasthan’s vehicle financing market. As of Dec 31, 2024, the Setia family holds 33.1% equity, while investors like Norwest, TPG, IIFL, and others hold 54.3%. The board includes promoter, independent, and nominee directors.


As of Dec 31, 2024, SKFL had a net worth of ₹3,361 crore, gearing of 3.6x, and capital adequacy of 31.7%. Gearing may rise with growth, but the planned IPO will support capital levels, keeping gearing in the 3–4x range.


SKFL’s yields remained strong at 17.7% in 9M FY25, though spreads narrowed to 8.1% due to higher funding costs. NIM rose to 8.8%, but RoMA dipped to 2.2% from 2.7% amid higher credit costs. Profitability is expected to recover as asset quality stabilises and scale improves.



Security Name: 9.25% SK Finance Limited 15 Jul 2027

ISIN: INE124N07754

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SK Finance Limited

SK Finance files draft papers with Sebi to raise ₹2,200cr via IPO

SK Finance standalone net profit rises 97.95% in the December 2023 quarter

SK Finance loan book jumps 27% to ₹13,261 crore in FY25; eyes ₹2,200 crore via IPO

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