Northern Arc Capital IPO: Date, GMP, Price , Review 2024

Northern Arc Capital’s IPO is a book-built issue worth ₹777 crore. The issue consists of a fresh issue of 1.9 crore shares amounting to ₹500 crore and an offer for sale of 1.05 crore shares totaling ₹277 crore.

The IPO will open for subscription on September 16, 2024, and close on September 19, 2024. The allotment of shares is expected to be finalized by Friday, September 20, 2024, and the listing on the BSE and NSE is tentatively set for Tuesday, September 24, 2024.

The price band for Northern Arc Capital’s IPO is set between ₹249 and ₹263 per share. Retail investors can apply for a minimum lot size of 57 shares, requiring an investment of ₹14,991.

For small non-institutional investors (sNII), the minimum lot size is 14 lots (798 shares), amounting to ₹209,874. For large non-institutional investors (bNII), it is 67 lots (3,819 shares), totaling ₹1,004,397.

Additionally, the issue includes a reservation of up to 590,874 shares for employees, offered at a discount of ₹24 per share to the issue price.

Northern Arc Capital IPO Details

Northern Arc Capital IPO Timeline

About Northern Arc Capital

Northern Arc Capital Limited is a diversified financial services platform established to address the varied credit needs of underserved households and businesses across India.

Over the past 15 years, the company has built a differentiated and comprehensive presence in India’s retail credit ecosystem, spanning various sectors.

They have developed expertise in facilitating credit across key focus areas, including micro, small, and medium enterprises (MSME) financing, microfinance (MFI), consumer finance, vehicle finance, affordable housing finance, and agricultural finance.

Northern Arc Capital has been actively involved in MSME, MFI, and consumer finance sectors for over 14 years, 15 years, and nine years, respectively. Since entering the financial inclusion space in 2009, the company has facilitated over ₹1.73 trillion in financing, positively impacting more than 101.82 million lives across India, as of March 31, 2024.

According to reports, Northern Arc is one of the leading diversified non-banking financial companies (NBFCs) in India based on Assets under Management (AUM) as of March 31, 2024.

The company’s business model is diversified across offerings, sectors, products, geographies, and borrower categories.

In addition, Northern Arc has developed an efficient, scalable business model that provides an end-to-end, integrated technology product suite tailored to multiple sectors.

Northern Arc Capital IPO Valuation

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Strengths & Financials of Northern Arc Capital

Risks

1. Any disruptions in Northern Arc Capital’s funding sources could materially affect the company’s operational efficiency and growth prospects.
2. Northern Arc Capital is exposed to high-risk borrower segments, and any large-scale defaults within these sectors could negatively impact the company’s financial performance and overall operations.
3. The microfinance sector in India is subject to stringent regulatory oversight, and any adverse regulatory changes could significantly affect Northern Arc Capital’s business model and profitability.
4. Additionally, the fund management industry may face emerging challenges, which could pose risks to the company’s financial stability and future performance.

Strength

1. Northern Arc Capital has established a growing and diverse network of Originator Partners and Investment Partners across various industries, strengthening its business model.
2. Their proprietary Nimbus technology platform enhances operational efficiency while allowing the company to explore new commercial opportunities.
3. The company is geographically diverse, offering a wide range of products and services to various borrower segments, further mitigating concentration risk.
4. Over the years, Northern Arc has continually refined and improved its risk management framework, ensuring robust systems to manage credit and operational risks effectively.

Consolidated Statement Of Assets And Liabilities

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Northern Arc Capital Profit and Loss Statement

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Northern Arc Capital IPO Lot Size

Investors can place bids for a minimum of 57 shares and in multiples thereafter. The table below outlines the minimum and maximum investment limits for retail investors and High Net Worth Individuals (HNIs), specifying both the number of shares and the corresponding investment amounts.

Northern Arc Capital Anchor List

An anchor list in an IPO refers to a group of institutional investors, such as mutual funds, insurance companies, or sovereign wealth funds, who are allocated shares before the IPO opens to the public.

These anchor investors are typically high-profile and trusted in the market, providing credibility and confidence in the offering. They are required to hold the shares for a minimum period, usually 30 days, which helps stabilize the stock price post-listing.

The anchor list is usually disclosed a day before the IPO opens, giving retail and other investors insight into the strength of institutional interest.