Veritas Finance is moving forward with an IPO to raise ₹1,500 crore, significantly reducing the target from its previous ₹2,800 crore plan. The Chennai-based lender, which focuses on MSME loans, will file updated documents with SEBI shortly. The company reported a profit of ₹328 crore for FY26.
Detailed Coverage
Chennai-based shadow bank Veritas Finance is preparing to file fresh draft papers with the Securities and Exchange Board of India (SEBI) for an initial public offering. This move comes after the company previously deferred its listing plans in 2025 due to concerns over shifting global trade policies.
The revised IPO plan now targets a total raise of ₹1,500 crore, down from the earlier plan of ₹2,800 crore. The structure of the offering has also shifted. It will now include a fresh issue of approximately ₹900 crore intended for capital infusion, alongside an offer for sale (OFS) of around ₹600 crore. This shift prioritizes raising money to support the company’s own balance sheet rather than providing an exit for existing shareholders.
Business Model and Financial Performance
Founded in 2015 by D Arulmany, Veritas Finance primarily lends to micro, small, and medium enterprises (MSMEs) and self-employed individuals. Over time, it has diversified into home loans and loans against used commercial vehicles. As of the end of the 2026 financial year, the company’s loan assets under management reached ₹9,134 crore.
Financially, the company reported a profit of ₹328 crore for FY26, compared to ₹295 crore in the previous year. Revenue grew to ₹1,857 crore from ₹1,566 crore. While the business has grown, investors may track asset quality closely. As of the end of FY26, gross non-performing assets (GNPA) stood at 2.5 percent, with net NPAs at 1.4 percent. These figures indicate the proportion of loans that are not being repaid on time.
Market Valuation and Investor Context
With a net worth of ₹3,150 crore as of March 2026, the company is reportedly targeting valuation multiples between 1.8x and 2.2x one-year forward price-to-book value. This range is generally consistent with current industry benchmarks for similar non-banking financial companies. The company is backed by several private equity firms, including Norwest Venture Partners, Multiples PE, Kedaara Capital, and Lok Capital.
The lending sector remains competitive, and the company’s performance will depend on its ability to manage credit risk while expanding its portfolio in the MSME segment. The next significant steps for investors to monitor include the official filing of the updated draft red herring prospectus and subsequent comments from the regulator regarding the approval process and timelines for the issue.