Apr, 1: Chennai-based non-banking financial company Dugar Finance has raised $5 million in a Pre-Series A funding round led by HegdInvst, a Category II AIF focused on growth equity investments. The capital will support the company to scale its secured MSME lending franchise alongside its established vehicle finance business, and to deepen its presence across tier 2-6 underserved semi-urban and rural markets.
The company has previously raised approximately $18 million in structured debt from a mix of domestic and international lenders, including Symbiotics and British International Investment (BII), along with multiple Indian banks in December 2025.
The latest fundraise comes at a time when several NBFCs are recalibrating growth amid tighter liquidity conditions and rising credit costs. Dugar Finance is positioning itself for the next phase of calibrated expansion from a foundation of demonstrated credit discipline.
While historically anchored in commercial and passenger vehicle finance, Dugar Finance is expanding its presence in secured MSME lending, with the aim of building a more balanced and diversified loan book across both segments.
“We are entering the next phase of growth, where diversification and institutional disciplined scaling become critical. Vehicle finance gave us a strong foundation, and we are now leveraging that to build a broader secured lending platform,” said Ramesh Dugar, Founder and Managing Director, Dugar Finance
The company aims to progressively move toward a more even mix between secured MSME and commercial vehicle finance, improving resilience across credit cycles.
Dugar Finance currently operates across six states and plans to expand to ten states over the next three years, alongside a calibrated expansion of its branch network. The company is targeting ₹2,000 crore in AUM in the next 3-4 years, while aiming to maintain current levels of GNPA below 2% and RoA in the 4–5% range; reflecting a continued emphasis on profitable, quality-driven growth.
The fresh capital will be deployed across four key areas: strengthening technology infrastructure, advancing analytics-led underwriting and centralised risk systems, and hiring senior talent across critical functions.
For Hegdinvst, the investment reflects its stated strategy of backing regionally strong Secured NBFCs with demonstrated credit discipline focusing on underserved markets.
“Dugar Finance combines a solid promoter group and a clear intent towards creating a professionally run NBFC focused on Tier 2 to 6 towns. We see significant potential in its strategy to scale a well governed & diversified secured lending platform” said Aditya Bhandari, Founder and Managing Partner, HegdInvst
Beyond capital, HegdInvst will actively support Dugar Finance in strengthening its governance framework, access to international capital, and assisting in building their professional management team.
