Chennai-based NBFC Veritas Finance, backed by well-known investors like British International Investment Plc, Kedaara Capital, and Norwest Venture Partners, submitted its draft papers to the Securities and Exchange Board of India (SEBI) to raise a substantial INR 2,800 crore through an offer-for-sale and new equity.

IPO Details and Fund Allocation
The fresh issue, amounting to INR 600 crore, is slated to expand the company’s capital base to fuel future expansion and more lending. The offer-for-sale, which makes up INR 2,200 crore, allows existing investors like Norwest Venture Partners and Kedaara Capital to cash out some of their stakes, each offloading shares worth INR 550 crore. British International Investment and Lok Capital are also in line to sell stakes valued at INR 500 crore and INR 425 crore, respectively. There will also be a provision of a pre-IPO placement, potentially up to INR 120 crore, which would decrease the fresh issue size if it goes through.
Financials and Growth
Since starting up in 2015, Veritas Finance has been on a tear, becoming one of India’s fastest-growing NBFCs. By 30 September 2024, the company’s loan book soars to INR 6,517 crore, boasting a 61.76% CAGR from FY22 to FY24. The NBFC earned INR 720 crore in revenue and INR 133 crore in profit during the first half of FY25. The company’s income in the fiscal year 2024 was INR 1,124 crore, while its profit after tax increased by 38.9% to INR 245 crore. The net interest income for the year increased by 53.6% to INR 718.1 crore. Loan payments also increased, reaching INR 3,702.43 crore, a 65% rise over the prior year.
Veritas Finance – Business Offerings
Veritas Finance focuses on the underserved—MSMEs and self-employed in rural and semi-urban areas. Here’s how its portfolio breaks down:
- Rural Business Loans dominate with 72.27% of the AUM, offering an average loan of INR 4.7 lakh at a yield of 22.83%.
- Affordable Housing Loans, launched in 2022, make up 17.62% of the AUM, with loans averaging INR 11.3 lakh and yielding 16.63%.
- Used Commercial Vehicle Loans, a newer addition since March 2024, contribute 1.28% to AUM, with an average ticket size of INR 4.5 lakh at a 19.25% yield.
- Unsecured Working Capital Loans for MSMEs in urban and semi-urban locales, with a high yield of 27.03% on an average loan of INR 1.8 lakh.
With 424 branches across 10 states and one union territory, Veritas leverages the enormous MSME credit gap, which CRISIL estimates will be INR 32.5 trillion in FY24. The business’s digital-first approach and in-house credit scoring have improved its operational efficiency and risk management. Interestingly, 89.61% of its inflows are currently handled by digital collections.
Veritas Finance IPO – Major Stakeholders
As of 30 June 2024, the shareholder lineup includes:
- Norwest Venture Partners with 21.76%
- Kedaara Capital Fund II LLP holding 15.2%
- British International Investment Plc at 10.41%
- Lok Capital with 11.3%
D. Arulmany, the company’s MD and CEO, holds a 9.42% stake, with other investors like Growth Catalyst Partners LLC and Avendus Future Leaders Fund also on board.
In order to capitalize on its specialized focus on underserved rural and semi-urban markets, Veritas Finance is expected to compete with rivals like Five Star Business Finance and SBFC Finance.

In Conclusion
The IPO from Veritas Finance represents a key step in the company’s journey, leveraging its robust financial health and strategic market positioning to potentially attract a wide investor base, all while aiming to close the credit gap in India’s hinterlands.
For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.