IPO Details
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IPO Size
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Schedule of Veritas Finance Ltd IPO
Start date
End date
Allotment of bids
Refund Initiation
Listing on exchange
About Veritas Finance Limited IPO
The offer consists of a fresh issue of equity shares aggregating up to ₹600 crores and an offer for sale of equity shares by the selling shareholders aggregating up to ₹2200 crores. The total IPO size is ₹2800 crores.
Objective of Veritas Finance Limited IPO
Augmenting the company's capital base to meet future business requirements towards onward lending, which may arise out of growth of its business and assets.
Veritas Finance Limited IPO Valuation
| Detail | Information |
|---|---|
Upper Price Band | TBA |
Fresh Issue | Up to ₹600 crores |
Offer for Sale | Up to ₹2200 crores |
EPS (in ₹) for FY 24 | 19.04 |
Share Offer and Subscription Details
| Investor Category | Shares Offered |
|---|---|
QIBs | Not more than 50% of the net offer |
Non-institutional Investors (NIIs) | Not less than 15% of the net offer |
Retail-individual Investors (RIIs) | Not less than 35% of the net offer |
Industry Outlook
The MSME sector in India faces a significant credit gap, which is projected to grow to approximately ₹103 trillion by Financial Year 2024. The affordable housing finance market was valued at ₹12 trillion as of Financial Year 2024, with incremental demand projected at ₹50-60 trillion. On the other hand, the unsecured business loans sector reached ₹70.90 trillion in Financial Year 2024, with a growth rate of 16.3% CAGR from Financial Year 2019. With a similar upward trend, the commercial vehicle financing market in India is expected to grow at a CAGR of 13% between Financial Years 2024 and 2027.
Company Information
Veritas Finance Limited, established in 2015, is a retail-focused NBFC. The company is classified as a middle-layer website. The company's primary business involves providing loans to MSMEs and self-employed individuals. As of September 30, 2024, its Loans (AUM) aggregated to ₹6,517.21 crore. Veritas Finance has a widespread distribution network with 424 branches across 10 states and one union territory in India. The company has expanded its business to include home loans and used commercial vehicle loans.
Veritas Finance Ltd Strengths
Diversified and secured portfolio
Veritas Finance has a diversified, granular, and largely secured portfolio. The company also experiences the fastest growth in terms of Loans (AUM) among compared peers. Its portfolio is backed by self-residential property. This diversification and expertise in different regions are also supported among MSME-focused peer companies.
Extensive distribution network
Veritas Finance has a widespread, deep, and largely in-house distribution network, serving borrowers in rural and semi-urban markets. It also has multiple new businesses using the existing distribution footprint. As of September 30, 2024, Veritas Finance has 424 branches across 10 states and one union territory in India.
Data-driven credit assessment and risk management
Veritas Finance uses a data-driven credit assessment and has a robust risk management framework with a multi-layered collection ecosystem. Its credit scorecard model digitally records data points as part of the credit assessment process, with different businesses relying on different data points. The company also has an in-house risk model based on credit scores.
Risks of Veritas Finance Limited IPO
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High credit risk due to first-time borrowers: Veritas Finance's business involves exposure to high credit risk from lending to first-time borrowers in under-served households and businesses in India. These borrowers, constituting 24.72% of Loans (AUM) as of September 30, 2024, may be adversely affected by economic factors that impact its income-earning capacity, potentially leading to increased defaults and impacting the company's financial health.
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Increased levels of non-payment or defaults: Non-payment or defaults by borrowers may lead to increased levels of Gross Carrying Amount – Loans – Stage 3, and related provisioning and write-offs, which could negatively affect the company's financial condition, results of operations, and cash flows. Loans overdue for more than 90 days may be classified as Gross Carrying Amount – Loans – Stage 3 per regulatory guidelines.
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Inability to assess creditworthiness: The lack of access to historical credit information on new customers, particularly in the MSME sector, can hinder the ability to appropriately assess their creditworthiness. Difficulties in assessing creditworthiness and risk profiles of borrowers could negatively affect the business.
All Financial Information about Veritas Finance Ltd
Particulars (in Rs. crores)
Particulars (in Rs. crores)
Comparison with peers
| Name of the Company | Total Income | EPS (Basic) (₹) | NAV per Equity Share (₹) | P/E |
|---|---|---|---|---|
Veritas Finance Limited | 1,117.49 | 19.04 | 182.68 | - |
Five Star Business Finance | 2,195.10 | 28.64 | 177.68 | 22.98 |
SBFC Finance Limited | 1,019.92 | 2.35 | 25.87 | 36.21 |
Aavas Financiers Limited | 2,020.69 | 62.03 | 476.79 | 26.31 |
Aptus Value Housing Finance India Limited | 1,416.85 | 12.27 | 75.52 | 22.20 |
Cholamandalam Investment and Finance Company Limited | 19,419.87 | 41.17 | 233.26 | 29.82 |
Sundaram Finance Limited | 7,285.50 | 130.31 | 997.10 | 34.33 |
Anchor Investor Bidding Date: TBA
Registrar: KFin Technologies Limited
Book Running Lead Managers:
- ICICI Securities Limited
- HDFC Bank Limited
- Jefferies India Private Limited
- Kotak Mahindra Capital Company Limited
- Nuvama Wealth Management Limited
Business Model
Veritas Finance operates as a retail-focused NBFC, primarily offering loans to MSMEs and self-employed individuals in rural and semi-urban areas who lack access to formal financing. Its product portfolio includes rural business loans, affordable home loans, and used commercial vehicle loans, supported by a network of 424 branches. A key aspect of its model is a proprietary credit assessment process that evaluates the income-earning capacity and cash flows of borrowers, rather than relying solely on traditional documentation. It has a "hub and spoke" model, with branches in semi-urban areas and service centers in smaller towns, ensuring last-mile coverage. The company also focuses on digital collections and maintaining a close physical presence to understand borrowers' business ecosystems.
Company Growth Trajectory
Veritas Finance's EBITDA grew from ₹416.45 crore in FY23 to ₹660.94 crore in FY24. Revenue from operations increased from ₹680.23 crore in FY23 to ₹1,111.20 crore in FY24, primarily driven by growth in interest income, fee and commission income, and net gain on fair value changes.
Veritas Finance Limited Profit and Loss
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Total Income (₹ crores) | 1,117.49 | 680.79 | 442.23 |
Profit Before Tax (₹ crores) | 322.96 | 232.85 | 101.36 |
Profit After Tax (₹ crores) | 245.05 | 176.40 | 75.40 |
EPS (Basic) | 19.04 | 14.85 | 6.75 |
Veritas Finance Limited Balance Sheet
| Parameter | FY 24 | FY 23 | FY 22 |
|---|---|---|---|
Profit Before Tax (₹ crores) | 322.96 | 232.85 | 101.36 |
Net Cash from (used in) Operating Activities (₹ crores) | (1,936.56) | (1,172.79) | (553.14) |
Net Cash from (used in) Investing Activities (₹ crores) | 132.05 | (157.63) | 355.52 |
Net Cash from (used in) Financing Activities (₹ crores) | 2,043.70 | 1,233.94 | 384.25 |
Net Cash and Cash Equivalents at Year-End (₹ crores) | 477.44 | 238.25 | 334.73 |
How to Check Allotment Status of Veritas Finance Limited IPO?
1. Visit the Registrar's Website
To check the IPO allotment status for Veritas Finance Limited IPO, visit the official website of KFin Technologies Limited, the registrar for this IPO. On their IPO allotment status page, enter your Permanent Account Number (PAN), application number, or Demat account ID. Then, click the ‘Submit’ button to view your allotment status. Ensure you have the necessary details ready for a quick and accurate check.
2. Check on the Bombay Stock Exchange Website
The Bombay Stock Exchange (BSE) also has an IPO allotment status page. Go to www.bseindia.com and find the 'Investors' tab. Under 'Investors', click on 'IPO'. This will take you to the IPO allotment status page.
On the BSE IPO page, follow these steps
- Select 'Equity' from the dropdown menu
- Choose 'Veritas Finance Limited' in the next dropdown
- Enter your application number
- Enter your PAN
- Click 'Search'
Your Veritas Finance IPO allotment status will be displayed.
3. Verify on the National Stock Exchange Website
The National Stock Exchange (NSE) has an IPO Bid Verification module. Use this to check Veritas Finance IPO allotment status.
Go to www.nseindia.com and find the 'Invest' tab. Click on 'Verify IPO Bids' under 'Resources & Tools'.
On the NSE IPO Bid Verification page, enter:
- Application number
- PAN
Then click 'Submit'. Your Veritas Finance IPO bid and allotment details will be displayed.
How to Apply for Veritas Finance Limited IPO?
- Step 1: Log in to your Kotak Securities Demat account - Log in to your Demat account to access IPO investments. Next, select the current IPO section.
- Step 2: Specify IPO details - Enter the number of lots and the price you wish to apply for.
- Step 3: Enter UPI ID - After entering your UPI ID, click submit. This will place your bid with the exchange.
- Step 4: Mandate Notification - Your UPI app will receive a mandate notification to block funds.
- Step 5: Approve Request - Your funds will be blocked once you approve the mandate request on your UPI.
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI-prescribed Combined Risk Disclosure Document before investing. Brokerage will not exceed SEBI’s prescribed limit.
Veritas Finance Ltd IPO FAQs
What is the Veritas Finance Ltd IPO?
The Veritas Finance Ltd IPO consists of a fresh issue of equity shares to raise up to ₹600 crore and an offer for sale of existing shareholders' equity shares aggregating up to ₹2,200 crore.
Is Veritas Finance IPO coming?
Yes, Veritas Finance Ltd is expected to come up with its IPO soon.
Who is the chairperson of Veritas Finance?
Raj Vikash Verma is the chairman of Veritas Finance.
What is the lot size of shares of Veritas Finance Ltd IPO?
The company hasn’t given any information on the lot size yet.
From where can I read more about the IPO of Veritas Finance Ltd?
You may read more about Veritas Finance Ltd and its IPO from the company’s draft red herring prospectus (DRHP) here
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