Norwest Venture Partners and Kedaara Capital-Backed Veritas Finance IPO Gets SEBI Nod

Veritas Finance, a Chennai-based non-banking financial company (NBFC) backed by Norwest Venture Partners and Kedaara Capital, has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO). The proposed public issue includes a fresh equity issue of Rs 900 crore and an offer for sale (OFS) of up to 1.28 crore shares by existing shareholders.

The development marks an important step towards the company’s planned Stock Market listing after it revised and refiled its draft IPO papers in July 2026. According to SEBI’s processing status of draft offer documents published on November 9, the regulator issued its observations on October 19, 2026.

With the regulatory observations received, Veritas Finance can move forward with the next stages of the IPO process, including filing its red herring prospectus with the Registrar of Companies (RoC). The document will provide further details, including the issue opening dates and final offer structure.

Key Highlights

• Veritas Finance has received SEBI’s observations on its revised draft IPO papers.
• The company plans to raise Rs 900 crore through a fresh issue of equity shares.
• Existing shareholders will sell up to 1.28 crore shares through an offer for sale.
• The NBFC may consider a pre-IPO placement of up to Rs 180 crore.
• Veritas Finance reported a 12% rise in FY26 net profit to Rs 330.4 crore.

Veritas Finance IPO: Fresh Issue and Offer for Sale Details

The proposed Veritas Finance IPO consists of two components: a fresh issue of equity shares worth Rs 900 crore and an offer for sale of up to 1.28 crore equity shares by existing investors.

Money raised through the fresh issue will go directly to the company. Veritas Finance plans to use the proceeds to strengthen its capital base and support future business requirements, including onward lending.

The OFS component will allow existing shareholders to sell part of their holdings through the public issue. Unlike a fresh issue, the proceeds from an offer for sale generally go to the selling shareholders rather than the company.

Who Are the Selling Shareholders in Veritas Finance IPO?

Several existing investors and shareholders are expected to participate in the offer for sale. These include Lok Capital Growth Fund, British International Investment plc, the UK government-backed investment institution, and individual shareholders D Arulmany, Growth Catalyst Partners LLC and Vidya Arulmany.

The participation of these shareholders will form part of the IPO’s final offer structure. The number of shares offered and the allocation details will be disclosed in the company’s subsequent offer documents.

Veritas Finance May Raise Rs 180 Crore Through Pre-IPO Placement

Before launching the public issue, Veritas Finance may consider raising up to Rs 180 crore through a pre-IPO placement. Such a transaction would allow the company to raise capital from investors before the IPO is opened to the public.

If the company completes the placement before filing its red herring prospectus with the Registrar of Companies, the size of the fresh issue will be reduced accordingly. Therefore, the final amount to be raised through the public issue may differ from the currently proposed structure.

The company will need to disclose the final issue details in its updated offer documents. Investors will be able to assess the complete structure, pricing information and other relevant details once the prospectus becomes available.

Veritas Finance IPO Gets SEBI Approval After Earlier Filing

This is not the first time Veritas Finance has approached the capital markets regulator for an IPO. The company initially filed its draft offer papers in January 2025, proposing to raise up to Rs 2,800 crore through a public issue.

SEBI approved the earlier draft offer document in April 2025. However, Veritas Finance did not proceed with the IPO at that time.

The company subsequently refiled its draft IPO papers on July 29, 2026, with a revised offer structure. SEBI issued its observations on October 19, 2026, according to the regulator’s processing status published on November 9.

Receiving SEBI’s observations allows the company to proceed with the IPO process, but it does not mean that the shares have already been listed or that the issue has opened for subscription. The company must complete the remaining regulatory and procedural steps before the public offering.

Who Owns Veritas Finance? Norwest and Kedaara Are Major Investors

Veritas Finance has several institutional investors, with Norwest Venture Partners holding the largest stake among the shareholders mentioned in the company’s ownership structure.

The reported shareholding pattern includes:

• Norwest Venture Partners: 21.58%
• Kedaara Capital Fund: 15.08%
• British International Investment: 10.33%
• Lok Capital: 9.48%

Lok Capital was founded by Rajiv Lall and Vishal Mehta. The institutional backing reflects the company’s investor base as it prepares for its proposed transition to the public markets.

What Does Veritas Finance Do?

Incorporated in 2015, Veritas Finance is a professionally managed, retail-focused non-banking financial company headquartered in Chennai. It primarily serves micro, small and medium enterprises (MSMEs) and self-employed individuals.

The company offers multiple lending products designed to meet the financial requirements of small businesses and individual borrowers. Its product portfolio includes:

• Small business loans
• Housing loans
• Used commercial vehicle loans
• Working capital loans

These products allow the company to serve customers with different borrowing requirements, particularly small businesses and self-employed individuals who may need financing for business operations, asset purchases or housing-related needs.

Veritas Finance Financial Performance in FY26

Veritas Finance reported growth across key financial and business indicators during the financial year ended March 2026. Its net profit increased 12% year-on-year to Rs 330.4 crore, compared with the previous financial year.

Net interest income (NII), which represents the difference between interest earned on loans and interest paid on borrowings, rose 18% to Rs 1,133.5 crore in FY26.

The company’s assets under management (AUM) also recorded significant growth. AUM increased 24.3% to Rs 9,134 crore in FY26 from Rs 7,348.6 crore in the previous year.

Disbursements, representing the loans distributed to customers during the period, increased 16.4% to Rs 4,579.5 crore from Rs 3,933.1 crore.

The financial performance provides investors with an overview of the company’s lending activity, profitability and business expansion ahead of its proposed IPO.

Veritas Finance IPO: Comparable Listed Companies

Veritas Finance identifies several listed NBFCs and financial services companies as comparable peers. These include Five-Star Business Finance, SBFC Finance, Aavas Financiers, Aptus Value Housing Finance India and Sundaram Finance.

Peer comparisons can help investors understand how a company operates relative to other businesses in the financial services sector. However, differences in loan portfolios, customer segments, geographical presence and business models should also be considered when evaluating companies.

Who Are the Merchant Bankers Managing the Veritas Finance IPO?

Four financial institutions have been appointed as merchant bankers for the proposed public issue. These are ICICI Securities, IIFL Capital Services, JM Financial and SBI Capital Markets.

Merchant bankers play an important role in managing IPO-related activities, including regulatory documentation, issue structuring and coordination with other market intermediaries.

What Investors Should Know Before the Veritas Finance IPO

SEBI’s observations are an important regulatory milestone, but investors will need to wait for the red herring prospectus and subsequent IPO announcements for complete details.

Before considering the issue, investors should examine the company’s financial performance, asset quality, loan portfolio, borrowing costs and capital requirements. These factors are particularly important for NBFCs because their profitability and growth depend heavily on lending operations and the management of credit risk.

The final issue price, subscription dates, lot size and other investment details will become available through the company’s official offer documents and subsequent announcements.

Conclusion

The SEBI nod for Veritas Finance’s revised IPO papers brings the Chennai-based NBFC closer to its proposed stock market debut. Backed by Norwest Venture Partners and Kedaara Capital, the company plans to raise Rs 900 crore through a fresh issue, alongside an offer for sale of up to 1.28 crore shares by existing shareholders.

With the possibility of an additional Rs 180 crore pre-IPO placement and FY26 net profit of Rs 330.4 crore, the proposed offering will attract attention from investors tracking India’s NBFC sector. The next important developments will be the filing of the red herring prospectus, disclosure of final issue details and announcement of the IPO schedule.