Veritas Finance receives SEBI approval to launch Rs 2,800 crore IPO

Veritas Finance, a non-banking financial company (NBFC) focusing on retail finance, has received the green light from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). The public offering consists of a fresh issue of equity shares worth Rs 600 crore and an offer for sale of equity shares up to Rs 2,200 crore, each with a face value of Rs 10. The IPO also includes a reservation of shares for eligible employees. The proceeds are intended to boost Veritas's capital base, support future business needs, and facilitate onward lending.

Established in 2015, Veritas Finance caters to the financial needs of micro, small, and medium enterprises (MSMEs) and self-employed individuals. The company offers various financial products, including small business loans, home loans, and used commercial vehicle loans. Veritas is recognized as the fastest-growing NBFC in its category, boasting a compounded annual growth rate (CAGR) of 61.76% from financial years 2022 to 2024, according to a CRISIL MI&A report.

The company has strategically targeted underserved segments, focusing on facilitating access to credit for MSMEs and individuals who are often overlooked by traditional finance providers. As of September 2024, the average loan ticket size was noted to be ₹5 lakhs, indicating its commitment to small-scale lending, which remains a key growth area. This approach has allowed Veritas to significantly outpace market growth in its MSME loan book, covering both rural and urban sectors.

Veritas Finance reported its audited financial results for FY25, where its total income increased 39.5 per cent YoY to Rs 1,550.67 crore, while its net profit increased 20.47 per cent YoY to Rs 295.11 crore. The company saw a 19.47 per cent YoY rise in net worth at Rs 2,783.17 crore for the year reported.

Veritas Financeis classified as an 'NBFC-Middle Layer' by the Reserve Bank of India. The company's operational strategy is heavily focused on addressing gaps in credit availability, thereby empowering MSMEs and self-employed individuals across India. The proposed IPO aims to further solidify the company's financial foundations and expand its lending capabilities.

The lead managers for the IPO are ICICI Securities, HDFC Bank, Jefferies India, Kotak Mahindra Capital Company, and Nuvama Wealth Management. These institutions are expected to guide the IPO process, aiding Veritas in navigating the public offering landscape effectively. KFin Technologies is the registrar for the issue.

The IPO schedule, including open and close dates, allotment details, and listing timelines, is anticipated to be announced shortly. Veritas's focus on underserved niches and its rapid growth trajectory make it an attractive opportunity for investors looking to invest in a company with a strong record of growth and profitability.