Renuka Ramnath-led Multiples Private Equity and its co-investors including International Finance Corporation (IFC) have struck a deal to invest Rs 1,200 crore (around $145 million) in Veritas Finance Pvt. Ltd in a round that involves both primary capital infusion and a secondary sale.
The deal comprises a primary issuance of Rs 400 crore and provides a partial exit to early investors British International Investment (BII) and Lok Capital, Veritas and Multiples PE said in a statement. Multiples PE, along with co-investor IFC and others, will be infusing Rs 1,050 crore. Avendus Future Leaders Fund also participated in the transaction with 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 non-banking finance company will use the capital to expand access to capital for India’s micro, small and medium enterprises.
“The fresh capital raised will provide significant runway for growth, help deepen our existing offerings and expand into the affordable housing space. We believe these partnerships will further catalyse our mission to serve the underserved,” said D Arulmany, managing director and chief executive officer, Veritas.
Investment banking firm Avendus Capital was the exclusive financial adviser to Veritas on this transaction.
In 2021, Veritas had 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.
Multiples PE has invested the capital from its third fund, which had mobilised $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 Rs 5,200 crore) from marquee anchor investors including Canada Pension Plan Investment Board (CPPIB), IFC, State Bank of India and other domestic investors.
“Veritas’ understanding of micro-SME businesses across different geographies combined with frameworks has enabled it to build a large, diversified franchise. Arulmany, along with the top-notch management team has scaled the business while maintaining quality,” said Nithya Easwaran, managing director, Multiples Alternate Asset Management.
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.
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.
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.
Meanwhile, Avendus Future Leaders Fund’s portfolio comprises companies in the digital, consumption and financial services sectors. It is investing out of its second fund that raised $185 million (Rs 1,500 crore). The fund 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, Avendus has backed players such as Delhivery, VerSe Innovation, Bikaji Foods, NSE, Ujjivan Small Finance Bank, Xpressbees and Indegene, among others.
