Veritas Finance Limited
DRHP · filed 03 Aug 2026
This is a draft. SEBI has not cleared it, there is no final price yet, and it may never become an IPO.
Veritas Finance Limited is a non-banking financial company that lends to first-time borrowers and under-served households in India, with a debt-to-equity ratio of 2.36 as of March 31, 2026. The company's financial trajectory is exposed to high credit risk, as 21.17% of its loan book consists of first-time borrowers and its Stage 3 loans aggregated to Rs 2,264.00 million as of March 31, 2026. The draft prospectus highlights material risks regarding borrower defaults, which could adversely affect the company's financial condition, results of operations, and cash flows.
What stands out
Auditor qualification. The auditor's report on the financial statements of the Company included qualifications in the report on the Companies (Auditor’s Report) Order, 2020 issued by the Central Government of India in terms of sub section (11) of section 143 of the Act (CARO 2020) as at and for the year ended March 31, 20
Risk factor. Our business involves exposure to high credit risk, first-time borrowers in under-served households and businesses in India (with such loans constituting 21.17% of our Loans (AUM) as of March 31, 2026). These borrowers may be adversely affected by economic and other factors that affect their income-
Risk factor. Non-payment or defaults by our borrowers may lead to increased levels of Gross Carrying Amount – Loans – Stage 3 (which aggregated to ₹2,264.00 million, ₹1,620.78 million and ₹1,025.97 million as of March 31, 2026, March 31, 2025 and March 31, 2024, respectively) and related provisioning and write-o
Risk factor. Defaults by our borrowers for a period of more than 90 days and other qualitative factors, may result in our loans being classified as Gross Carrying Amount – Loans – Stage 3 in accordance with the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulations) Dir
Risk factor. Any increase in our Gross Carrying Amount – Loans – Stage 3 or Net Carrying Amount – Loans – Stage 3 could adversely affect our credit ratings and increase our borrowing costs, which could in turn adversely affect our interest margins, our business, financial condition, results of operations and cas
How the offer is structured
Risks the company discloses
Our business involves exposure to high credit risk, first-time borrowers in under-served households and businesses in India (with such loans constituting 21.17% of our Loans (AUM) as of March 31, 2026). These borrowers may be adversely affected by economic and other factors that affect their income-earning capacity, leading to increased customer defaults which could adversely affect our business, financial condition, results of operations and cash flows.(Credit Risk)
Non-payment or defaults by our borrowers may lead to increased levels of Gross Carrying Amount – Loans – Stage 3 (which aggregated to ₹2,264.00 million, ₹1,620.78 million and ₹1,025.97 million as of March 31, 2026, March 31, 2025 and March 31, 2024, respectively) and related provisioning and write-offs on our balance sheet, which could adversely affect our business, financial condition, results of operations and cash flows.(Credit Risk)
Defaults by our borrowers for a period of more than 90 days and other qualitative factors, may result in our loans being classified as Gross Carrying Amount – Loans – Stage 3 in accordance with the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulations) Directions, 2023 and the Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Directions, 2025 (the “NBFC Scale Based Regulations”).(Regulatory)
Any increase in our Gross Carrying Amount – Loans – Stage 3 or Net Carrying Amount – Loans – Stage 3 could adversely affect our credit ratings and increase our borrowing costs, which could in turn adversely affect our interest margins, our business, financial condition, results of operations and cash flows.(Credit Risk)
We require substantial funds for our business (our total borrowings as of March 31, 2026 were ₹73,740.97 million) and any disruption in our sources of funds could adversely affect our business, financial condition, results of operations and cash flows.(Liquidity)
Our business and results of operations depend on our ability to raise capital (equity as well as debt) on acceptable terms and in a timely manner. Our ability to raise capital depends on multiple factors, including our business performance and results of operations, credit ratings, risk management policies, regulatory requirements, government initiatives and regulatory environment, liquidity in the credit markets, financial health of our lenders, available collateral and other developments in the domestic and international capital markets.(Liquidity)
As of March 31, 2026, 21.17% of our loan book consisted of loans disbursed to first-time borrowers. Such loans are subject to a higher risk of non-payment or default due to the factors outlined above, including limited experience with timely interest payments and principal repayment. Among these first-time borrowers, our non-performing assets amounted to ₹576.25 million (constituting 2.98% of our Loans (AUM) disbursed to first-time borrowers) as of March 31, 2026.(Credit Risk)
We cannot assure you that we will be able to maintain or reduce our current levels of Gross Carrying Amount – Loans – Stage 3 or Net Carrying Amount – Loans – Stage 3 in the future. Negative trends or financial difficulties or a general economic slowdown could unexpectedly increase delinquency rates. Accordingly, if our borrowers fail to repay loans in a timely manner or at all, our business, financial condition, results of operations and cash flows could be adversely affected.(Credit Risk)