Chenna-based NBFC Veritas Finance has secured investment to the tune of Rs 1,200 crore from Multiples Private Equity along with its co-investors, including International Finance Corporation, apart from Avendus Future Leaders Fund.
The deal comprises a primary issuance of Rs 400 crore and provides a part exit to early investors, British International Investment (BII) and Lok Capital.
Of the total Rs 1,200 crore, a sum of Rs 1,050 crore came from Multiples Private Equity, IFC and others. Avendus Future Leaders Fund participated in the transaction with an investment of Rs 150 crore.
Veritas focuses on the large and underserved MSME financing market across semi-urban and rural geographies. Started in Tamil Nadu, the company has now expanded across eight states and one Union Territory with 285 branches and servicing 115,000 customers with an AUM of Rs 3,500 crore as on March 31, 2023.
The company primarily provides secured small business loans with an average ticket size of Rs 5 lakh.
The company proposes to use the fresh capital to enter new markets and strengthen its new product lines, including affordable housing loans.
Avendus Capital was the exclusive financial advisor to Veritas on this transaction.
D Arulmany, MD & CEO of Veritas, said, “Veritas is on a secular compounding journey, and we are excited to partner with an investor like Multiples who has admirable understanding of the financial services space.”
“In addition to Multiples, the current capital raise will also see Avendus FLF, known for backing future leaders, partnering with Veritas. The fresh capital raised will provide significant runway for growth, help deepen our existing offerings and expand into the affordable housing space,” Arulmany said.
Veritas lends to borrowers engaged in micro, small and medium enterprises (MSME) sector with limited access to formal financial services. The company has divided the product segments under three heads – MSME rural, MSME urban and home loans that cater to the various financing needs of the MSME sector – medium-term business loans, short-term working capital needs and long-term housing needs.
Nithya Easwaran, MD, Multiples Alternate Asset Management, said, “Veritas’ in-depth understanding of micro-SME businesses across different geographies combined with strong frameworks has enabled it to build a large, diversified franchise. Arulmany, along with the top-notch management team has scaled the business while maintaining pristine quality. ”