Veritas Finance files draft papers with SEBI to mobilise ₹2,800 cr via IPO

Veritas Finance Ltd, a retail focused non-deposit taking NBFC, has filed preliminary papers with markets regulator SEBI seeking its approval to raise ₹2,800 crore through an initial public offering (IPO).

The IPO comprises a fresh issue of equity shares aggregating up to ₹600 crore and an Offer-for-Sale (OFS) of equity shares worth ₹2,200 crore by the investor and individual selling shareholders, according to the draft red herring prospectus (DRHP) filed on Saturday.

The public offer includes a reservation of equity shares for subscription by eligible employees.

Under the OFS, shares worth ₹550 crore each would be offloaded by Norwest Venture Partners X – Mauritius and Kedaara Capital Fund II LLP, ₹500 crore by British International Investment plc, ₹425 crore by Lok Capital Growth Fund, and ₹75 crore by Growth Catalyst Partners LLC.

Additionally, individual shareholders are offering ₹36 crore by Vidya Arulmany, ₹21 crore each by P Surendra Pai and Savita S Pai, ₹14 crore by Sheela Pai Cole, and ₹

8 crore by Moneisha Sharad Gandhi.

The company proposes to utilize the net proceeds towards augmenting its capital base to meet future business requirements of the company towards onward lending.

The NBFC may consider a pre-IPO placement of securities aggregating up to ₹120 crore. If such placement is completed, the amount raised through the fresh issue will be reduced.

Founded in 2015, Veritas Finance, classified as an ’NBFC-Middle Layer’ by the Reserve Bank of India (RBI) primarily provides small business loans to micro, small and medium enterprises (MSMEs) and self-employed individuals, and over the years, has expanded its business to include home loans and used commercial vehicle loans.

According to CRISIL MI&A, Veritas Finance is the fastest-growing NBFC in terms of loans (AUM) growth among peers for the period between the financial years 2022 to 2024, with a compounded annual growth rate (CAGR) of 61.76 per cent.

ICICI Securities, HDFC Bank, Jefferies India, Kotak Mahindra Capital Company and Nuvama Wealth Management are the book-running lead managers to the issue. The equity shares are proposed to be listed on the BSE Ltd and National Stock Exchange of India Ltd.