Veritas Finance IPO

The Veritas Finance IPO is a 100% book-built issue, offering a total size of up to ₹2,800 crore, comprising a fresh issue of equity shares of up to ₹600 crore and an offer for sale (OFS) of up to ₹2,200 crore by existing investors and individual shareholders. The company's DRHP was filed with SEBI on January 18, 2025.

The company will later announce the price band, listing, and subscription dates. The shares would be listed on the BSE and the NSE platforms. The issue is being managed by the professional Book Running Lead Managers (BRLMs), including ICICI Securities Ltd, HDFC Bank Ltd, Jefferies India Private Ltd, Kotak Mahindra Capital Company Ltd, Nuvama Wealth Management Ltd, while the registrar of the issue is KFin Technologies Ltd.

Company Background

Veritas Finance Ltd. was incorporated on April 30, 2015, in Chennai, Tamil Nadu, as a private firm. The RBI awarded the company its certificate of registration (RoC) on October 15, 2015, to operate as a non-deposit-taking NBFC. The company has always operated under the RBI-based regulatory framework as an NBFC-Middle Layer.

The company was subsequently converted into a public company on June 10, 2024, and, accordingly, its name was changed. A new certificate of incorporation, following the name change, was issued on October 23, 2024. The company operates in Chennai and maintains a strong presence through a registered office in Guindy.

Operations & Product Range

Veritas Finance Ltd. is an NBFC that provides financial solutions to meet the credit needs of niche customer segments. The company is a Non-Banking Finance Company (NBFC) that provides a range of credit products, primarily for Micro, Small, and Medium Enterprises (MSMEs), including the Personal Loans segment. Loan origination based on the business cycles of its customers is Veritas's primary product. The company is a formal credit intermediary for the MSME sector.

Facilities & Capacity

Veritas Finance Ltd. operates its business through a network of branches and a corporate office in Chennai. The company's throughput is directly dependent on the total number of branches and systems used to process loans and manage risk. While the DRHP lists the current registered office as SKCL Central Square 1 in Chennai, the company has been expanding its office space to accommodate increased business.

Brands & Market Presence

Veritas Finance Ltd. operates under the brand name “Veritas Finance,” which is a new name and upstart in the Indian financial services sector, deriving its roots from 2015. The company’s market is primarily domestic, with a state-to-state focus and restricted credit products. Veritas Finance Ltd. has secured the material statutory approvals, namely RBI registration, which is fundamental to its existing business. They have been linked to externally imposed capital adequacy ratios, as the regulatory order has favored their position.

Revenue Streams & Business Model

The business model of Veritas Finance Ltd. is to earn revenue through interest income on loans and processing fees on loans disbursed. The financial assets of the company are loans to MSMEs and individuals, which earn interest income and are managed by the company. The company had a substantial loan portfolio of ₹6,400.58 crore as of September 30, 2024.

Management & Shareholding

Veritas Finance Ltd. is a professionally managed company, as its shareholding pattern before the IPO is spread across various institutional and individual investors. After the IPO, the shareholding pattern will become more diversified as new public shareholders enter the cap table with the fresh issue and OFS.

Board & Key Management

The board & key management of Veritas Finance Ltd. comprise professionals with rich experience who are driving the strategic operations of the company. Though the board comprises a fair representation of independent & nominee directors from its diverse set of contributors, very few selected individuals, like V. Aruna (CS&CO), are actively participating. The board is mandated to monitor the company’s compliance with RBI’s governance & directions and to support the Group’s growth strategy in the challenging NBFC sector.