Private equity firm Carlyle and Azim Premji's investment unit are in separate talks to invest about $150 million in TVS Credit Services, an arm of scooter and motorcycle maker TVS Motors, two sources told Reuters.
The winner of the race to bet on India's fast-growing NBFC sector could get a stake of 20 per cent, one of the sources said. A valuation of about ₹5,000 crore ($612 million) for TVS Credit is being discussed, both sources said.
The non-banking financial companies (NBFCs) chiefly serve lower-income customers typically ignored by traditional lenders in the world's most populous nation.
TVS Credit, which mainly offers loans for two-wheel vehicles and used cars, supporting its parent's business, recently expanded into personal, consumer loans and pre-approved credit via credit cards for items such as mobile phones.
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Carlyle engaged with the company a few months ago but Premji Invest is now the front-runner to strike a deal, said one of the sources, both of whom sought anonymity as the details of the talks were private.
A decision is expected by the end of May, the source added.
"There are two components to this business—the older, stable motor-financing arm and the new-age loans and services, which can be an add-on growth lever," the second source said.
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Carlyle and TVS declined to comment on the deal while Premji Invest did not reply to queries seeking comment.
TVS Credit's total income grew 14 per cent to ₹1,090 crore for the quarter ended December 31, while net profit stayed nearly flat at ₹97.9 crore, unaudited financial statements on its website show.
Private equity funds bet $2.2 billion on India's NBFCs last year, up 57 per cent from 2021, a report from Bain and Co showed. Last year, Warburg Pincus invested in Indian non-bank lender Vistaar.