Chennai-based Veritas Finance Pvt. Ltd, which provides financial services to micro and small enterprises, is holding discussions with existing and new investors to raise as much as Rs100 crore to fund growth plans.
“We have already begun the process and we are likely to complete this by around end of this financial year or early next year to help the company maintain the growth momentum,” company founder D. Arulmany said.
Veritas Finance was registered as a non-banking financial company (NBFC) by the Reserve Bank of India in October last year. This financial year would be its first full year of operations.
The company started with an initial capital of Rs13.60 crore and raised additional equity of Rs30 crore from Lok Capital and others, including Caspian Impact Investment Adviser, in a series A round of fund-raising this year.
The loan book of the company has crossed Rs50 crore; Veritas expects to end the financial year to March 2017 with a loan book of Rs100 crore.
“We plan to increase the loan book to Rs400 crore in the next year and cross Rs 1,000 crore in two years, which would mean we (need to) strengthen our capital base to support growth,” Arulmany added. The company has reached a monthly loan disbursement of Rs 9 crore.
Veritas Finance is seeking to expand from Tamil Nadu and Puducherry to east India as well as to two more states in the south–Karnataka and Andhra Pradesh.
Veritas focuses primarily on providing medium- and long-term credit to micro enterprises. Its average loan size is Rs4 lakh and the typical customers of Veritas–small and micro entrepreneurs who run bakeries, restaurants, and provision stores–have monthly incomes ranging from Rs25,000 to Rs60,000 with no prior exposure to formal business finance.
In the same space, Delhi-based NBFC Aye Finance raised about Rs70 crore last month in a Series B round of funding led by LGT Impact Ventures. Existing investors SAIF Partners and Accion also participated in the round.
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Source: Mint
