Temasek arm Fullerton to take controlling stake in Lendingkart: report

Fullerton Financial Holdings (FFH), the lending arm of Singapore-based investment fund Temasek, will be raising its holding in fintech start-up Lendingkart as part of capital infusion in the cash-starved financial services outfit.

FFH, which currently holds 38 per cent stake in Lendingkart, is looking to raise that stake to 60 per cent, according to media reports.

Lendingkart, which focuses on lending to micro, small, and medium enterprises (MSMEs), is facing a cash crisis in the wake of a spike in its unsecured loan portfolio.

The cash crunch has also resulted in nosediving of the company’s valuation to $100 million from $350 million in 2022.

Lendingkart is looking to raise additional capital from its existing investor, Fullerton Financial Holdings, at a lower valuation, according to reports. 

Reports say FFH has already infused around INR 772 crore into Lendingkart, after its asset quality deteriorated with a spike in non-performing assets (NPAs). 

Lendingkart also raised $10 million (around Rs83 crore) in May via external commercial borrowing from a fund managed by Swiss impact investor BlueOrchard. 

Also, in 2023, the fintech startup raised $24 million from EvolutionX Debt Capital.

While the cash crunch combined with the pressure of debt has increased its cost of funds, a tightening of regulations by the Reserve bank of India (RBI) has negatively impacted its financial position.