Micro Lender Veritas Finance Files Draft Papers For Rs 2,800-Crore IPO
The Veritas Finance IPO will comprise of a fresh issue worth Rs 600 crore, and an offer for sale worth up to Rs 2,200 crore.
Chennai-based micro lender Veritas Finance Ltd. filed draft papers for its initial public offering on Saturday. The company, which is backed by private investors like Kedaara Capital, Norwest Venture Partners, Lok Capital Growth Fund, is looking to raise up to Rs 2,800 crore via its maiden public offer.
The IPO will comprise of a fresh issue worth Rs 600 crore, and an offer for sale worth up to Rs 2,200 crore.
Among the selling shareholders, Norwest and Kedaara Capital will cash out on some of their stakes for Rs 550 crore each, while British International and Lok Capital will offload stakes worth Rs 500 crore and Rs 425 crore respectively.
The fresh issue will be used for "augmenting our capital base to meet future business requirements towards onward lending," as per the lender's draft red herring prospectus.
Veritas may also raise up to Rs 120 crore via a pre-IPO placement round. As per regulatory rules, the amount will be reduced from the fresh issue if the placement happens.
As on Sept. 30, Veritas Finance had a loan book of Rs 6,517 crore, with rural business loans making up over 72% of the portfolio. For the half-year ended September, the company reported total income of Rs 720 crore and a profit of Rs 133 crore. The company currently has long term credit rating of ‘CARE A+ with Positive Outlook’ from CARE Ratings.
"We have a diversified, granular and self-residential property backed secured portfolio with the fastest growth in terms of AUM among compared listed peers," the company said.
The lender, which started operations in 2015, claims to have a presence across 10 states with over 400 branches.
Five Star Business Finance Ltd., SBFC Finance Ltd., Aavas Financiers Ltd., Aptus Value Housing Finance India Ltd., Cholamandalam Investment and Finance Co., and Sundaram Finance Ltd. are the listed peers that Veritas will be competing against once the stock lists on the exchanges.
ICICI Securities Ltd., HDFC Bank Ltd., Jefferies India Pvt., Kotak Mahindra Capital Co. and Nuvama Wealth Management Ltd. are the bankers for the offering.
