Veritas Finance picks bankers for ₹2,000-crore IPO

Last year, the Chennai-based non-banking financial company had raised ₹1,200 crore in equity funding from Multiples PE and International Finance Corporation, among others, to expand access to capital for India’s micro, small and medium enterprises (MSMEs).

Veritas is also backed by Avendus Future Leaders Fund, Kedaara Capital, Norwest Venture Partners, British International Investment, and Lok Capital.

“The final contours of the IPO size and selling shareholders will be decided later. The company is looking to file papers with the regulator by the second half of the year,” said one of the persons cited above.

Veritas is likely to raise funding ahead of the IPO filing to realign its capitalisation table, said a second person familiar with the company’s plans.

Emailed queries sent to Veritas Finance, Jefferies, Kotak Mahindra Capital Co., HDFC Securities and ICICI Securities remained unanswered.

Founded in 2015 by D. Arulmany, Veritas offers loans to the underserved MSMEs in semi-urban and rural geographies. Today, it serves eight states and one Union territory primarily offering secured small business loans with an average ticket size of ₹5 lakh.

As on 30 September, Veritas had a net worth of ₹2,183 crore, as per a November 2023 ratings report published by ICRA. The company has more than 300 branches across 10 states, including Tamil Nadu, Andhra Pradesh, Bihar, and Jharkhand, as well as the Union Territory of Puducherry. 

Veritas had a gross loan portfolio of ₹4,483 crore as on 30 September, up from ₹3,534 crore as on 31 March, 2023.

For the six months ended 30 September, Veritas had registered a revenue of ₹492.65 crore and a profit after tax of ₹102.93 crore. The company’s gross non-performing assets stood at 2.09%, and its net NPA at 1.1%, according to a report by Icra.