Upcoming IPO! Veritas Finance files DRHP for Rs 2,800-cr offering with Sebi

Veritas Finance IPO: This would comprise of a fresh issue of equity shares, aggregating up to Rs 600 crore, and an offer for sale (OFS) of equity shares, aggregating up to Rs 2,200 crore

Veritas Finance files DRHP: Veritas Finance, a retail-focused non-bank finance company (NBFC), has filed its Draft Red Herring Prospectus (DRHP) with markets regulator Securities and Exchange Board of India (Sebi) for its initial public offering (IPO).

 

Veritas Finance, which a non-deposit taking NBFC, registered with the Reserve Bank of India (RBI) as a ‘middle layer’ NBFC, provides small business loans to micro, small and medium enterprises (MSMEs) and self-employed individuals. It has also diversified its portfolio towards home loans and used commercial vehicle loans over the years.

 

According to CRISIL MI&A, Veritas Finance NBFC was the fastest-growing NBFC, in terms of Loans (AUM) growth, between the financial years 2021-2022 (FY22) to FY 2023-2024 (FY24), with an impressive compounded annual growth rate of 61.76 per cent.

 

 

At the end of September 30, 2024, Veritas Finance had a loan book of Rs 6,517 crore, with rural business loans accounting for over 72 per cent of the portfolio.

 

For the half-year ended September, 2024, the company reported total income of Rs 720 crore and a profit of Rs 133 crore.

 

About Veritas Finance IPO

Veritas Finance IPO, if approved by Sebi, aims to raise up to Rs 2,800 crore via its public offering. This would comprise of a fresh issue of equity shares, aggregating up to Rs 600 crore, and an offer for sale (OFS) of equity shares, aggregating up to Rs 2,200 crore.

 

The equity shares are proposed to be listed on the BSE Limited and the National Stock Exchange of India Limited (NSE).

 

The institutional shareholders offloading their stake via the OFS include Norwest Venture Partners X – Mauritius – selling equity shares worth Rs 550 crore by; Kedaara Capital Fund II LLP – selling shares worth up to Rs 550 crore; British International Investment plc – selling shares up to Rs 500 crore; Lok Capital Growth Fund – selling shares worth up to Rs 425 crore; and Growth Catalyst Partners LLC – selling shares worth up to Rs 75 crore.

 

Among individual investors, Vidya Arulmany is selling shares worth up to Rs 36 crore; P. Surendra Pai and Savita S. Pai – selling shares worth up to Rs 21 crore each; Sheela Pai Cole – selling shares worth up to Rs 14 crore; and Moneisha Sharad Gandhi – selling shares worth up to Rs 8 crore.

 

According to the company, it aims to utilise the net proceeds of the IPO towards expansion of the capital base to meet future business requirements towards onward lending.

 

Apart from institutional and retail investors, Veritas Finance IPO will have a portion reserved for eligible employees.

 

According to Veritas Finance: The company, in consultation with the book-running lead managers (BRLMs), may consider a Pre-IPO placement of specified securities aggregating up to Rs 120 crore as may be permitted under applicable law, prior to filing of the red herring prospectus.

 

“The Pre-IPO placement, if undertaken, will be at a price to be decided by the company, in consultation with the BRLMs. If the PRE-IPO placement is completed, the amount raised pursuant to the PRE-IPO placement will be reduced from the fresh Issue,” it said in a press release.

 

ICICI Securities Limited, HDFC Bank Limited, Jefferies India Private Limited, Kotak Mahindra Capital Company Limited, and Nuvama Wealth Management Limited are the Book Running Lead Managers to the issue.