Dugar Finance raises $5M led by HegdInvst
Dugar Finance will utiise the capital to expand MSME lending franchise and get into Tier II and beyond locations
Dugar Finance, the Chennai-based non-banking financial company (NBFC), has raised $5 million in a pre-series A round led by HegdInvst, a Category II AIF focused on growth equity investments.
According to a statement, the capital will be used to scale the company’s 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 fresh capital will also be deployed across four key areas: strengthening technology infrastructure, advancing analytics-led underwriting and centralised risk systems, and hiring senior talent across critical functions.
Ramesh Dugar, Founder and Managing Director, Dugar Finance
Dugar Finance had 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.
“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.
According to Dugar Finance, historically it has anchored in commercial and passenger vehicle finance but now it is expanding its presence in secured MSME lending, with the aim of building a more balanced and diversified loan book across both segments. 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. The company is targeting Rs 2,000 crore in AUM in the next 3-4 years from the current level of Rs 400 crore, while aiming to maintain current levels of gross non-performing assets (GNPA) below 2% and Return on Assets (RoA) in the 4–5% range.
“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.