Bhubaneswar: Veritas Finance Limited, a retail focused non-deposit taking NBFC registered with the Reserve Bank of India (“RBI”), and under the scale-based regulations of the RBI, classified as an ‘NBFC-Middle Layer’, has filed the Draft Red Herring Prospectus (DRHP) with SEBI for an Initial Public Offering (IPO).
As a diversified, retail-focused NBFC, it primarily provides small business loans to micro, small and medium enterprises (“MSMEs”) and self-employed individuals, and over the years, has expanded its business to include home loans and used commercial vehicle loans.
The public offer aggregating up to Rs. 2,800 crore comprises of a fresh issue of equity shares aggregating up to Rs. 600 crore (“THE FRESH ISSUE”) and an offer for sale of equity shares aggregating up to Rs. 2,200 crore by the Selling Shareholders (“OFFER FOR SALE”) with a face value of ₹10 each per equity share. The public offer includes a reservation of equity shares for subscription by Eligible employees (“EMPLOYEE RESERVATION PORTION”).
The company proposes to utilize the net proceeds towards augmenting their capital base to meet future business requirements of the company towards onward lending.
The Offer for Sale of up to Rs 2,200 crore comprises of equity shares aggregating up 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 Referred to as the “Investor Selling Shareholders”) and equity shares aggregating 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 (Collectively The “Individual Selling Shareholder” and along with The Investor Selling Shareholders As The “Selling Shareholders”) (“OFFER FOR SALE”, And together with THE FRESH ISSUE, The “OFFER”).]
The company, in consultation with the BRLMs, may consider a Pre-IPO placement of specified securities aggregating up to Rs. 120 crore as may be permitted under applicable law, prior to filing of the red herring prospectus with the roc (“PRE-IPO PLACEMENT”). The Pre-IPO placement, if undertaken, will be at a price to be decided by the company, in consultation with the BRLMs. If the PRE-IPO placement is completed, the amount raised pursuant to the PRE-IPO placement will be reduced from the fresh Issue, subject to compliance with rule 19(2)(b) of the securities contracts (regulation) rules, 1957, as amended.
Established in 2015, Veritas Finance is a non-deposit taking non-banking financial company (“NBFC”) registered with the Reserve Bank of India (“RBI”), and under the scale-based regulations of the RBI, is classified as an ‘NBFC-Middle Layer’. As a diversified, retail-focused NBFC, it primarily provide small business loans to micro, small and medium enterprises (“MSMEs”) and self-employed individuals, and over the years, have expanded its business to include home loans and used commercial vehicle loans. According to CRISIL MI&A, it is the fastest-growing NBFC in terms of Loans (AUM) growth among compared peers for the period between the Financial Years 2022 to 2024, with a compounded annual growth rate (“CAGR”) of 61.76%. The company focuses on addressing the financial needs of underserved and underbanked MSMEs and individuals by providing access to credit.
ICICI Securities Limited, HDFC Bank Limited, Jefferies India Private Limited, Kotak Mahindra Capital Company Limited and Nuvama Wealth Management Limited are the Book Running Lead Managers to the issue.
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the Stock Exchanges, being BSE Limited (the “BSE”) and National Stock Exchange of India Limited (the “NSE”, together with BSE, the “Stock Exchanges”).
