MSME-focused lender Veritas Finance raises financing led by Norwest, Kedaara Capital
Veritas Finance Pvt. Ltd, a non-bank finance company (NBFC) focused on lending to micro, small and medium-sized enterprises (MSMEs) with a presence in eight states, said Thursday it had raised Rs 440 crore of primary investment through a Series F cycle led by existing investors Norwest Venture Partners, Kedaara Capital and Caspian with the support of new investors Evolvence India Fund III Ltd and Growth Catalyst Partners LLC.
The round also includes a sale of secondary shares of Rs60 crore by some of the company’s early investors and some former employees.
“The company handled the COVID crisis well, which hit the MSME segment well and is now well positioned to significantly increase volumes. The informal microenterprises in the MSME segment in rural areas, which is the core segment of the organization, have shown tremendous resilience during COVID and have demonstrated an excellent culture of repayment, despite huge challenges over the past fifteen months, ”said D. Arulmany, MD & CEO, Veritas Finance.
Despite the impact of the covid-19 pandemic and lockdowns, the lender managed to record 20% growth in its loan portfolio in FY21, Arulmany said, and expects to record a 40-50% growth in FY 22 to increase its loan portfolio to around Rs2,400-2,500 crore.
Lenders’ gross non-performing assets (NPA) stood at 2.5% as of March 31, 2021 and Arulmany expects to close FY 22 with NPA levels below 2% as the lender has seen its efficiency recovery to pre-crisis levels and its customers have shown it. strong resilience to disruption caused by covid-19.
Arulmany said the lender is seeing strong demand for loans in states such as Andhra Pradesh, Tami Nadu and Telangana. The lender, which is currently mainly present in the southern and eastern states, will look to expand its geographic presence in western India over the next 12 to 15 months, he said.
“The company continues to demonstrate strong execution, excellent team culture with the vision of becoming one of the leading retail NBFCs in India. 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.
This article first appeared on livemint.com.