NEW DELHI, Jan 20: Veritas Finance Ltd, a non-deposit taking NBFC focused on retail, has submitted initial documents to the market regulator SEBI to seek approval for raising ₹2,800 crore through an initial public offering (IPO).
The IPO includes a fresh issue of equity shares totaling ₹600 crore and an Offer-for-Sale (OFS) of equity shares amounting to ₹2,200 crore by investors and individual selling shareholders, as outlined in the draft red herring prospectus (DRHP) filed on Saturday.
The public offering will set aside a portion of equity shares for eligible employees to subscribe.
Under the OFS, shares valued at ₹550 crore each are set to be sold by Norwest Venture Partners X – Mauritius and Kedaara Capital Fund II LLP, ₹500 crore by British International Investment plc, ₹425 crore by Lok Capital Growth Fund, and ₹75 crore by Growth Catalyst Partners LLC.
Moreover, individual shareholders are offering ₹36 crore by Vidya Arulmany, ₹21 crore each by P Surendra Pai and Savita S Pai, ₹14 crore by Sheela Pai Cole, and ₹8 crore by Moneisha Sharad Gandhi.
The company aims to use the net proceeds to strengthen its capital base to support future business needs related to onward lending.
Veritas Finance may explore a pre-IPO placement of securities totaling up to ₹120 crore. If this placement takes place, the amount raised via the fresh issue will be adjusted accordingly.
Established in 2015, Veritas Finance is categorized as an ‘NBFC-Middle Layer’ by the Reserve Bank of India (RBI) and primarily provides small business loans to micro, small, and medium enterprises (MSMEs) as well as self-employed individuals. Over time, it has extended its services to include home loans and loans for used commercial vehicles.
According to CRISIL MI&A, Veritas Finance is the fastest-growing NBFC regarding loans (AUM) growth among its peers from the financial years 2022 to 2024, boasting a compounded annual growth rate (CAGR) of 61.76 percent.
ICICI Securities, HDFC Bank, Jefferies India, Kotak Mahindra Capital Company, and Nuvama Wealth Management are serving as the book-running lead managers for the issue. The equity shares are intended to be listed on BSE Ltd and National Stock Exchange of India Ltd. (PTI)
