Veritas Finance Secures SEBI Approval for IPO Featuring Rs 900 Crore Fresh Issue
Chennai-headquartered non-banking financial company (NBFC) Veritas Finance Limited has received the final observation letter from the Securities and Exchange Board of India (SEBI), clearing the path for its proposed initial public offering (IPO). In SEBI terminology, the issuance of observations represents formal regulatory clearance to launch a public issue.
The development follows the company's refiled Draft Red Herring Prospectus (DRHP) submitted to the capital markets regulator after an earlier regulatory clearance, obtained for a larger issue structure, neared expiration.
Issue Structure and Size
Under the updated draft offer documents, the IPO consists of both primary capital raising and secondary share dilution:
- A fresh issue of equity shares aggregating up to Rs 900 crore.
- An Offer for Sale (OFS) of up to 1,28,27,093 equity shares of face value Rs 10 each by existing selling shareholders.
- A potential pre-IPO placement of specified securities worth up to Rs 180 crore, which, if completed, will reduce the size of the fresh issue proportionally.
Veritas Finance had previously filed draft documents proposing a total fundraise of approximately Rs 2,800 crore, comprising a fresh issue of Rs 600 crore and an OFS component worth Rs 2,200 crore. The restructured issue expands the proportion of fresh growth capital being injected into the balance sheet.
The primary proceeds from the fresh issue are earmarked towards augmenting the company's Tier-I capital base to meet future capital requirements for onward lending.
Backing by Marquee Private Equity Investors
Veritas Finance is backed by private equity and venture capital entities that hold substantial stakes in the lending platform. Major institutional stakeholders in the company include Norwest Venture Partners, Kedaara Capital, British International Investment (BII), Lok Capital, and Growth Catalyst Partners.
The company, founded in 2015 and led by Managing Director and Chief Executive Officer D. Arulmany, operates as a non-deposit-taking NBFC classified under the Reserve Bank of India’s (RBI) Middle Layer framework. It caters primarily to micro, small, and medium enterprises (MSMEs) and self-employed borrowers with limited or no access to formal banking channels. Its core product portfolio encompasses rural business loans, affordable housing loans, used commercial vehicle financing, and working capital loans.
Financial Snapshot
The lender reported sustained expansion in its balance sheet and earnings profile over recent fiscal periods:
- Assets Under Management (AUM): Total AUM stood at Rs 9,134.29 crore as of March 31, 2026, delivering a compound annual growth rate (CAGR) of 26.33% from the financial year 2024.
- Disbursements: Total loan disbursements for the financial year ended March 31, 2026, reached Rs 4,579.53 crore.
- Revenues: Consolidated total revenue grew to Rs 1,848.60 crore in FY26 compared to Rs 1,557.40 crore in FY25.
- Profitability: Net profit after tax expanded to Rs 330.39 crore in FY26, up from Rs 295.11 crore reported in FY25.
As of March 31, 2026, the lender operated a branch network of 444 locations spanning 10 states and one Union Territory, with significant operational density across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, and West Bengal.
Issue Management
The book-running lead managers appointed to manage the public offering include ICICI Securities Limited, IIFL Capital Services Limited, JM Financial Limited, and SBI Capital Markets Limited. KFin Technologies Limited serves as the registrar to the issue. The equity shares are slated to be listed on the BSE and the National Stock Exchange of India (NSE).
