Veritas Finance Files DRHP for Rs 2,800 Crore IPO, Listing on BSE and NSE
Veritas Finance, a retail-focused non-deposit taking non-banking finance company (NBFC), has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO). The company aims to raise up to Rs 2,800 crore via its public offering, which is expected to be listed on the BSE Limited and the National Stock Exchange of India Limited (NSE).
Veritas Finance - Company Details
Veritas Finance is registered with the Reserve Bank of India (RBI) as a ‘middle layer’ NBFC. The company primarily provides small business loans to micro, small and medium enterprises (MSMEs) and self-employed individuals. It has also diversified its portfolio to include home loans and used commercial vehicle loans.
Established in 2015, Veritas Finance is considered the fastest-growing NBFC among compared peers in terms of loan growth from FY2022 to FY2024, achieving a compounded annual growth rate (CAGR) of 61.76%(According to CRISIL MI&A). As of September 30, 2024, Veritas Finance held a loan book of Rs 6,517 crore, with rural business loans accounting for over 72.27 percent of the portfolio. For the half-year ended September 2024, the company reported a total income of Rs 720 crore and a profit of Rs 133 crore.
IPO Structure
The IPO comprises 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 have a face value of Rs 10 each. The IPO also includes a reserved portion for eligible employees.
Use of Proceeds
Veritas Finance plans to utilize the net proceeds from the IPO to augment its capital base and meet future business requirements for onward lending.
Offer For Sale (OFS) Details
The OFS involves both institutional and individual shareholders. Institutional investors selling their stake include:
- Norwest Venture Partners X – Mauritius (selling equity shares worth Rs 550 crore)
- 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)
- Growth Catalyst Partners LLC (selling shares worth up to Rs 75 crore)
Individual investors participating in the OFS include:
- Vidya Arulmany (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)
- Moneisha Sharad Gandhi (selling shares worth up to Rs 8 crore)
Pre-IPO Placement
Veritas Finance, in consultation with the book-running lead managers (BRLMs), may consider a pre-IPO placement of specified securities aggregating up to Rs 120 crore. The pricing of the pre-IPO placement would be determined by the company in consultation with the BRLMs. If the pre-IPO placement is completed, the amount raised will be reduced from the fresh issue.
Book Running Lead Managers (BRLMs)
The book running lead managers to the issue are ICICI Securities Limited, HDFC Bank Limited, Jefferies India Private Limited, Kotak Mahindra Capital Company Limited, and Nuvama Wealth Management Limited, while the registrar of the issue will be KFin Technologies Limited.
Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.