Veritas Finance Pvt Ltd, focused on lending to micro, small, medium enterprises (MSMEs), on Thursday said that it has raised Rs 440 crore of primary investment through a Series F round led by existing investors Norwest Venture Partners, Kedaara Capital and Caspian with support from new investors Evolvence India Fund III Ltd and Growth Catalyst Partners LLC.
The round also includes a secondary share sale of Rs 60 crore by some early investors and some former employees.
Promoted in 2015 by D Arulmany, Veritas Finance has created a loan book of more than Rs 1,750 crore, a customer base of over 60,000 across eight states and one Union Territory and over 218 branches backed by 2,402 employees.
The lender provides business loans for self-employed people and home construction loans for these customers. It offers loans of Rs 3-10 lakh for a duration of 5-7 years.
“The company has handled the COVID crisis which hit the MSME segment well and is today well-positioned to scale up the volumes significantly. The informal micro enterprises of the MSME segment in the rural areas, which are the core focus segment of the organisation, have shown tremendous resilience during COVID and have demonstrated excellent repayment culture, despite enormous challenges during the last 15 months,” said D Arulmany, MD & CEO of Veritas Finance.
Despite the impact of the pandemic and the lockdowns, the lender managed to report a 20% growth in its loan book in FY21, said Arulmany, and expects to clock a 40-50% growth in FY22 to grow its loan book to around Rs 2,400-2,500 crore.
The lender’s gross non-performing assets (NPAs) stood at 2.5% as of 31 March 2021 and Arulmany expects to close FY22 with NPA levels of below 2% as the lender has seen its collection efficiency recover to pre-Covid levels and its customer base has shown strong resilience to the disruptions caused by Covid-19.
Arulmany said that the lender is seeing strong demand for loans in states such as Andhra Pradesh, Tamil Nadu and Telangana. The lender, which is currently present mostly in southern and eastern states, will look to expand its geographic presence in western India in the next 12-15 months, he said.
“The business continues to demonstrate strong execution, great team culture with a vision to become one of India’s leading retail NBFCs. The company has invested in the right building blocks to enable scale with a high degree of corporate governance, technological prowess and institutionalization,” said Shiv Chaudhary, managing director of Norwest Venture Partners, India.