Veritas Finance IPO Details

Incorporated in 2015, Veritas Finance Limited is a Non-banking financial company (NBFC”) registered with the Reserve Bank of India.

As a diversified, retail-focused NBFC, the company primarily offers small business loans to MSMEs and self-employed individuals and has expanded to include home loans and used commercial vehicle loans.

The company addresses the financial needs of underserved MSMEs and individuals by offering products like small business loans, housing loans, used commercial vehicle loans, and working capital loans to bridge the credit gap.

The company sources lead for Rural Business and Working Capital Loans in-house while using direct selling agents for Affordable Home and Used Commercial Vehicle Loans, with 88.67% of loans sourced in-house.

The company has a distribution network of 424 branches across 10 states and one union territory in India, with a strong presence in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, and West Bengal.

As of September 30, 2024, the company maintains relationships with 36 lenders and 11 debt security holders, including banks, mutual funds, NBFCs, and alternate investment funds.

Business:

They provide loans to the target borrowers for business purposes, asset creation, and personal requirements through their four businesses:

• Rural Business Loans: The company started offering Rural Business Loans in FY 2016, focusing on small business and rural construction loans for self-employed individuals, traders, and micro enterprises in rural areas with limited formal financing access.
• Affordable Home Loans: The company began offering secured home loans in October 2022, focusing on self-employed individuals, small business owners, and salaried borrowers, leveraging an extensive branch network and in-house marketing for loan sourcing.
• Used Commercial Vehicle Loans: The company launched its vehicle finance business in March 2024, offering low-ticket loans for small commercial and light vehicles, leveraging its branch network and internal sales team for lead generation.
• Working Capital Loans (Unsecured): The company offers unsecured Working Capital Loans to micro and small enterprises, targeting borrowers without formal records, using a proprietary credit model, and promoting gender equity with loans for women entrepreneurs.

As of September 30, 2024, the company had 7,704 full-time employees on payroll.

Competitive Strengths:

• Diversified, granular, and largely secured portfolio with the fastest growth in terms of Loans (AUM) among compared peers
• Widespread, deep, and largely in-house distribution network serving borrowers in rural and semi-urban markets with multiple new businesses using the existing distribution footprint
• Data-driven credit assessment and robust risk management framework with a multilayered collection ecosystem
• Technology-enabled scalable and resilient operating model resulting in short turnaround times and control over operational metrics
• Access to diversified and cost-effective sources of funding backed by a broad lender base
• Professional and experienced management team with deep domain expertise, backed by marquee investors and guided and supported by a distinguished Board.