Private equity (PE) firm Norwest Venture Partners has led the latest round of investment of ₹200 crore into non-banking financial company (NBFC) Veritas Finance Pvt. Ltd. Existing investors of Veritas—CDC Group Plc, UK’s Development Finance Institution and P. Surendra Pai, an anchor investor—also participated in the Series D investment, Veritas said in a statement on Thursday.
Veritas lends to micro, small and medium enterprises (MSMEs). It began operations in 2015 and currently has 132 branches and more than 21,000 customers.
Veritas proposes to use the fresh capital to deepen its presence in existing markets by enhancing lending to MSMEs for business expansion, working capital and for asset creation.
“MSMEs are the backbone of the Indian economy. Considering they are an underserved segment, they continue to need access to formal credit system.,” said D. Arulmany, managing director and chief executive at Veritas Finance.
“Through this round of funding, besides expansion, we will also strengthen our technology which will help us achieve higher productivity and bring down the cost of servicing micro-businesses,” he added.
The lender has a loan book of ₹500 crore.
“Veritas Finance is uniquely positioned to drive growth and provide financial services to micro, small and medium enterprises in India,” said Sumer Juneja, director at Norwest Venture Partners. “We look forward to working with Veritas Finance team to further enhance their footprint, services and technology by bringing more value to their customers.”
Investment bank Avendus Capital was the sole financial adviser to Veritas.
The deal comes at a time when the NBFC sector has been hit by a liquidity crisis, triggered by defaults at Infrastructure Leasing and Financial Services Ltd.