Multiples PE leads ₹1,200 cr funding in Veritas Finance, two investors exit

The deal comprises of a primary issuance of Rs 400 crore and provides a part exit to early investors, British International Investment (BII) and Lok Capital, the lender and Multiples PE said in a statement. 

While Multiples PE, along with co-investor World Bank’s private investment arm IFC and others, will be infusing ₹1,050 crore; Avendus Future Leaders Fund also participated in the transaction investing Rs 150 crore. 

Veritas proposes to use the fresh capital to enter new markets and strengthen its new product lines, including affordable housing loans. 

“The fresh capital raised will provide significant runway for growth, help deepen our existing offerings and expand into the affordable housing space. We strongly believe these partnerships will further catalyse our mission to serve the underserved," said D. Arulmany, MD & CEO of Veritas.

Investment banking firm Avendus Capital was the exclusive financial advisor to Veritas on this transaction.

Vertias was founded by Arulmany in 2015 in Tamil Nadu catering to the underserved MSME financing market in semi-urban and rural geographies. Today, it serves across eight states and one union territory primarily offering secured small business loans with an average ticket size of Rs 5 lakh. 

 

The lender operates in over 285 branches and servicing 115,000+ customers with an AUM of more than Rs 3,500 crore as on March end 2023.

“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..," said Nithya Easwaran, Managing Director, Multiples Alternate Asset Management.

 

Multiples PE has invested the capital from its third fund, which had mobilized $680 million in 2021. 

In May this year, the homegrown private equity firm had marked the first close of its fourth fund after collecting $640 million (over  ₹5,200 crore) from marquee anchor investors including North America’s Canada Pension Plan Investment Board (CPPIB), IFC, country’s largest lender State Bank of India and other domestic investors.

 

Multiples PE focuses on core sectors of financial services, pharmaceuticals and healthcare, consumer and technology. Last year, in an interview with VCCircle,  Easwaran highlighted the investor’s aim to double down on its fintech play from the new fund. 

 

More than a decade ago, Multiples raised its maiden fund in 2011 garnering $405 million and another $690 million in its second fund in 2016. 

 

Floated by Renuka Ramnath in 2009, Multiples PE has so far deployed capital across 30 Indian companies from its first three funds. Its portfolio includes several unicorns such as Delhivery, Acko, PVR, Dream Sports and Licious with a valuation of at least $1 billion. 

 

Besides Acko and Veritas Finance, some of its other bets in the financial services space include Kogta Finance, Niyo, Vastu Housing Finance, APAC Financial Services, South Indian Bank, Cholamandalam, RBL Bank and Sanctum Wealth. 

 

Meanwhile, Avendus Future Leaders Fund’s portfolio comprises of companies in the digital, consumption and financial services space. Investing out of its second fund that raised $185-million ( ₹1,500-crore), it has bet on companies such as SBI General Insurance, Juspay, Lenskart, Zeta and Licious and now Veritas.

 

Since inception, including its $50-million fund I launched in 2019, it has backed players such as Delhivery, VerSe Innovation, Bikaji Foods, NSE, Ujjivan Small Finance Bank, Xpressbees and Indegene, among others.