Veritas Finance files DRHP for a 2800 crore IPO
Veritas Finance Limited has submitted its draft red herring prospectus (DRHP) to Sebi for an initial public offering (IPO).
The IPO, totaling up to Rs 2,800 crore, consists of a fresh issue of Rs 600 crore and an offer for the sale of equity shares totaling up to Rs 2,200 crore by the selling shareholders, with a face value of Rs 10 each. Additionally, there is a provision for eligible employees to subscribe to equity shares.
The company intends to use the net proceeds to strengthen its capital base in order to meet future business needs for lending purposes.
The offer for sale of up to Rs 2,200 crore includes equity shares amounting to Rs 550 crore by Norwest Venture Partners X – Mauritius; up to Rs 550 crore by Kedaara Capital Fund II LLP; up to Rs 500 crore by British International Investment plc; up to Rs 425 crore by Lok Capital Growth Fund;
up to Rs 75 crore by Growth Catalyst Partners LLC (collectively known as the “Investor Selling Shareholders”), and equity shares totaling up to Rs 36 crore by Vidya Arulmany; up to Rs 21 crore by P. Surendra Pai; up to Rs 21 crore by Savita S. Pai; up to Rs 14 crore by Sheela Pai Cole; and up to Rs 8 crore by Moneisha Sharad Gandhi.
The company, in coordination with the BRLMs, may consider a pre-IPO placement of specified securities totaling up to Rs 120 crore, subject to applicable laws, before filing the red herring prospectus with the RoC. The pricing of the pre-IPO placement will be determined by the company in consultation with the BRLMs. If the pre-IPO placement is executed, the amount raised will be deducted from the fresh issue, in accordance with rule 19(2)(b) of the securities contracts (regulation) rules
The equity shares being offered through the red herring prospectus are intended to be listed on the BSE and National Stock Exchange of India. Veritas Finance is a retail-focused non-deposit-taking NBFC registered with the Reserve Bank of India and classified as an ‘NBFC-Middle Layer’ under RBI regulations.
Veritas Finance, established in 2015, is a diversified NBFC that primarily offers small business loans to micro, small, and medium enterprises, as well as self-employed individuals. The company has expanded its services 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 its peers for the period between FY2022 and FY2024, with a compounded annual growth rate of 61.76%. The company is dedicated to meeting the financial needs of underserved and underbanked MSMEs and individuals by providing them with access to credit.
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