US Tariff Impact on MSMEs: Veritas Finance Delays ₹2,800 Crore IPO

As per the Moneycontrol report, Veritas Finance Ltd, a non-banking financial company focused on MSMEs, has deferred its planned ₹2,800 crore IPO over adverse market sentiment triggered by recent US tariffs impacting Indian exports. The financial services firm was eyeing a mid-August listing before geopolitical tensions reshaped the outlook.

Veritas Finance IPO Delay Linked to MSME Export Concerns

As per the reports, the decision to delay the IPO stems from the 50% tariff imposed by the US on Indian exports, including a 25% penalty for trade with Russia. These developments have severely impacted sectors such as textiles, gems and jewellery, seafood, auto components, and chemicals, where MSMEs dominate with over 70% participation. 

These industries contribute significantly to India's outbound trade, and the tariff shock has led to caution in the equity markets, especially for NBFCs serving MSMEs.

Veritas Finance’s Business Footprint and Growth

Veritas Finance provides various secured loan products like working capital loans, used commercial vehicle loans, affordable housing loans, and rural enterprise loans. It has built a strong presence with 424 branches across 10 states and 1 union territory. As of September 30, 2024, it held a loan book of ₹6,517 crore. In FY24 alone, it recorded a 62% year-on-year loan book growth, jumping from ₹3,533 crore to ₹5,723 crore.

IPO Plan and Market Timing

The ₹2,800 crore IPO included a fresh capital raise of ₹600 crore and an offer-for-sale component by early investors. Though the company received SEBI approval in April 2025, valid for 12 months, it is awaiting more stable market conditions to proceed. The company foresees a more supportive environment in the second half of the fiscal year as investor sentiment may improve for financial firms in the MSME segment.

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Regional Exposure and Future Outlook

As per the reports, Veritas derives 88% of its loan portfolio from Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and West Bengal, totalling ₹5,772.6 crore. The firm remains cautiously optimistic about launching the IPO later this fiscal year, post consultation with stakeholders. Market participants are watching closely for recovery in the MSME ecosystem before reassessing the IPO schedule.

Conclusion

Veritas Finance has taken a prudent step in delaying its IPO in light of the sharp impact of recent US tariffs on its core customer base. With high regional loan exposure and continued sectoral uncertainty, the NBFC aims to revisit market listing once economic conditions stabilise for MSMEs.

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