India: Kedaara Capital eyes stake in Norwest-backed SME lender Veritas Finance

Private equity (PE) fund Kedaara Capital is in advanced discussions to acquire a stake in small business lender Veritas Finance at a valuation of 2,000 crore, two people aware of the talks said.

Kedaara plans to put in about 500 crore, along with existing investors such as Norwest Venture Partners and CDC Group, the UK government’s development finance institution, the people cited above said on condition of anonymity.

Veritas lends to micro, small and medium enterprises (MSMEs), and currently has a loan book of over 1,200 crore with 199 branches and over 45,000 customers, according to its website.

Veritas managing director and CEO D. Arulmany and Kedaara’s managing partner Manish Kejriwal did not respond to emails seeking comment.

Before starting Veritas in 2015, Arulmany was the president and CEO of Aptus Value Housing Finance, which is currently valued at over 5,000 crore and has investors including Sequoia, Steadview and Westbridge Capital.

Arulmany was also an early employee at the Cholamandalam Group, one of India’s oldest financial services conglomerates during 1996-2008, ending his stint there as the business head of Chola DBS, which started out as an equal joint venture between the Muruguppa Group and Singapore’s DBS Bank.

“A lot of investors are betting on the founder’s quality and experience in the lending space. It is very valuable to have an experienced hand running a new-age lending firm at a time when the sector hasn’t done too well,” said an investor in the space, requesting anonymity.

The lending firms successfully raising equity currently are the ones that have managed to keep their default rates low at a time when the country has seen its worst-ever credit crisis, triggered by multiple defaults by firms such as Infrastructure Leasing and Financial Services, Altico Capital and Dewan Housing Finance Ltd, among others.

Indifi, which provides loans to small businesses in travel, e-commerce and retail, raised 145 crore led by the CDC Group in August, while Lendingkart, which offers collateral-free working capital and other business loans to small businesses raised 212 crore from its existing investors including Fullerton Financial Holdings and Bertelsmann India Investments around the same time.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.