Edelweiss Financial Services Ltd said on Wednesday US-based Kora Management would invest $125 million in the Indian financial services company, weeks after Canadian private equity firm CDPQ's investment of $255 million.

Kora will invest $75 million in Edelweiss Financial's advisory business and a further $50 million in Edelweiss Group, the shadow bank said.

Indian shadow banks are facing a funding crisis as domestic lenders are wary to invest in them following industry behemoth IL&FS default amid fraud allegations, leaving many of them to seek overseas support.

In May, rival Cholamandalam Investment and Finance Company Ltd said it would raise $222 million through bonds from foreign investors.

Mumbai-based Edelweiss said in March that CDPQ's Asian arm made a $150-million investment as the first tranche of its total outlay.