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Chennai-based education firm Veranda Learning has raised Rs 425 crore in debt funding through non-convertible debentures (NCDs) from BPEA Investment Managers Private Limited (BPEA Credit).

The NCD is part of a larger fundraise to be completed in the next three to six months, the company said, adding that it will balance the risk profile by raising equity-like instruments in the future.

The move aims to fuel the company’s growth by financing acquisitions, refinancing existing loans, and bolstering working capital requirements. The acquisitions, aimed at filling the gaps in the Veranda ecosystem, are expected to be completed by the first half of the financial year 2024-25, it noted.

Veranda’s entire growth strategy almost completely relies on acquisitions—it has spent over Rs 1,000 crore to buy over a dozen companies so far. Its acquisitions have increased its revenue from Rs 2.5 crore in FY21 to nearly Rs 200 crore in FY23; in the first half of FY24, its revenue has crossed Rs 170 crore, The CapTable reported earlier this year.

“…The proceeds from the NCD issuance will be instrumental in supporting our expansion plans, enabling us to pursue strategic acquisitions, enhance operational efficiencies, and drive long-term value creation for our stakeholders,” said Suresh Kalpathi, Executive Director and Chairman of Veranda Learning.

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Kanchan Jain, Head of BPEA Credit Group, said that the investment in Veranda is in line with its fund’s objective of participating in growth-oriented businesses.

Anand Rathi Advisors, the lead bankers who helped in arranging the capital for Veranda, believe that the education sector will attract investor support for good-quality platforms. 

“Anand Rathi Group sees immense potential in this sector and [is] pleased to have facilitated transactions exceeding $450 million in FY24 alone, including this significant deal,” Atul Thakkar, Director of Anand Rathi Investment Banking, remarked.

Founded in 2018 by the Kalpathi AGS Group, Veranda Learning Solutions is a publicly listed education company that offers a bouquet of training programmes for competitive exam preparation, as well as a slew of professional skilling and upskilling programmes.