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Chennai-based non-banking finance company Veritas Finance Pvt Ltd, which lends to micro, small and medium enterprises, has raised ₹350 crore in a Series E round. Kedaara Capital is the new investor in this round, which also saw participation from existing investors Norwest Venture Partners, Lok Capital Growth Fund and the family of P Surendra Pai, who has been an anchor investor in the venture since it was founded.
Veritas, according to D Arulmany, Managing Director and CEO, will use the money to penetrate into existing markets and seed out new markets.
Sarva Capital, one of the early investors, has sold its investment in Veritas and fully exited the company. The other existing investors, Caspian and CDC plc, continue to stay invested in the venture.
Arulmany told BusinessLine that the company, including the latest round, has raised about ₹750 crore overall from investors.
Expanding presence
Veritas is present in eight States — Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, West Bengal, Odisha, Jharkhand and Madhya Pradesh — and Puducherry, and has 201 branches. Apart from expanding its presence in these States during 2020-21, Veritas also plans to enter Maharashtra, Chhattisgarh and Bihar. In the new States it enters, the company will initially open 6-8 branches. After seeding the market and testing it out for 12-18 months, it will set up more branches.
Founded in 2015, Veritas Finance has a loan book of ₹1,308 crore as on February 29, 2020, with 48,638 customers and 1,840 employees.
Veritas has 3-4 products to meet the credit requirements of the MSMEs. Its average cheque size is ₹4 lakh and the loans are for a five-year period. According to Arulmany, the company has been able to bring down its cost of borrowing over the last five years and has also passed it on to its customers. The net NPAs stand at 1.5 per cent.
Arulmany said Veritas had raised about ₹800 crore of debt. There were over 40 lenders it borrowed from, including public and private sector banks, NBFCs and small finance banks.
On the demand for credit from its target segment, Arulmany said MSMEs, especially in the rural areas, were largely unaffected by the economic cycles, because of which demand for credit continued to be good.
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