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
| IPO Date | September 16, 2024 to September 19, 2024 |
| Listing Date | 24th September 2024. |
| Face Value | ₹10 per share |
| Price Band | ₹249 to ₹263 per share |
| Lot Size | 57 Shares |
| Total Issue Size | 29,543,727 shares (aggregating up to ₹777.00 Cr) |
| Fresh Issue | 19,011,407 shares (aggregating up to ₹500.00 Cr) |
| Offer for Sale | 10,532,320 shares of ₹10 (aggregating up to ₹277.00 Cr) |
| Employee Discount | Rs 24 per share |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Share holding pre issue | 142,314,010 |
| Share holding post issue | 161,325,417 |
Northern Arc Capital IPO Timeline
| IPO Open Date | Monday, September 16, 2024 |
| IPO Close Date | Thursday, September 19, 2024 |
| Basis of Allotment | Friday, September 20, 2024 |
| Initiation of Refunds | Monday, September 23, 2024 |
| Credit of Shares to Demat | Monday, September 23, 2024 |
| Listing Date | Tuesday, September 24, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on September 19, 2024 |
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
Here is the table with the given data:
| Particulars | Value |
|---|---|
| Upper Price Band | Rs 263 |
| Existing Shares (Qty) | 14.23 Cr |
| Fresh Issue | 500 Cr |
| Market Cap | 4242.49 Cr |
| EPS (FY24) | Rs 34.61 |
| PE Ratio | 7.59x |
| Industry PE | 23.28x |
Let me know if you need further adjustments!
Strengths & Financials of Northern Arc Capital
Risks
- Any disruptions in Northern Arc Capital’s funding sources could materially affect the company’s operational efficiency and growth prospects.
- 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.
- 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.
- Additionally, the fund management industry may face emerging challenges, which could pose risks to the company’s financial stability and future performance.
Strength
- Northern Arc Capital has established a growing and diverse network of Originator Partners and Investment Partners across various industries, strengthening its business model.
- Their proprietary Nimbus technology platform enhances operational efficiency while allowing the company to explore new commercial opportunities.
- The company is geographically diverse, offering a wide range of products and services to various borrower segments, further mitigating concentration risk.
- 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
Here is the table with the provided data
| Particulars | As at September 30, 2023 | As at March 31, 2023 | As at March 31, 2022 | As at March 31, 2021 |
|---|---|---|---|---|
| ASSETS | ||||
| Financial assets | ||||
| Cash and cash equivalents | 1,969.74 | 2,323.40 | 7,151.74 | 3,980.76 |
| Bank balances other than cash and cash equivalents | 1,708.58 | 1,902.59 | 873.44 | 684.07 |
| Derivative financial instruments | 563.73 | 610.48 | 15.19 | – |
| Trade receivables | 202.24 | 286.14 | 191.84 | 183.54 |
| Loans | 80,695.36 | 68,886.06 | 52,087.56 | 37,407.67 |
| Investments | 16,726.99 | 17,627.34 | 17,657.51 | 13,825.68 |
| Other financial assets | 534.65 | 505.90 | 696.52 | 47.39 |
| Total financial assets | 1,02,401.29 | 92,141.91 | 78,673.80 | 56,129.11 |
| Non-financial assets | ||||
| Current tax assets (net) | 232.93 | 291.16 | 420.87 | 357.92 |
| Deferred tax assets (net) | 296.87 | 351.79 | 136.91 | 207.18 |
| Property, plant, and equipment | 59.89 | 38.13 | 19.55 | 10.50 |
| Intangible assets under development | 8.03 | 9.89 | 2.84 | 5.40 |
| Goodwill | 236.60 | 240.70 | 17.46 | 17.46 |
| Other intangible assets | 124.20 | 133.71 | 94.29 | 97.28 |
| Right of use asset | 157.58 | 96.66 | 112.17 | 98.54 |
| Investment in associates | 23.73 | 272.66 | – | – |
| Other non-financial assets | 170.47 | 139.11 | 263.27 | 48.26 |
| Total non-financial assets | 1,310.30 | 1,573.81 | 1,067.36 | 842.54 |
| Total assets | 1,03,711.59 | 93,715.72 | 79,741.16 | 56,971.65 |
| LIABILITIES AND EQUITY | ||||
| LIABILITIES | ||||
| Financial liabilities | ||||
| Derivative financial instruments | 78.51 | 22.76 | 64.38 | 89.85 |
| Trade payables – Micro enterprises & small enterprises | – | – | – | – |
| Trade payables – Other than micro enterprises | 1,440.40 | 1,096.12 | 558.17 | 156.19 |
| Debt securities | 11,846.53 | 12,243.16 | 13,435.97 | 16,395.68 |
| Borrowings (Other than debt securities) | 66,373.94 | 57,702.99 | 45,994.26 | 22,525.83 |
| Subordinated liabilities | – | 399.51 | 399.35 | 398.88 |
| Other financial liabilities (including lease liabilities) | 1,022.87 | 1,101.93 | 669.44 | 423.04 |
| Total financial liabilities | 80,762.25 | 72,566.47 | 61,121.57 | 39,989.47 |
| Non-financial liabilities | ||||
| Provisions | 416.79 | 333.54 | 224.57 | 176.35 |
| Current tax liabilities (net) | 21.25 | – | – | – |
| Deferred tax liabilities (net) | – | 2.00 | 7.23 | 9.77 |
| Other non-financial liabilities | 124.29 | 136.41 | 66.67 | 66.89 |
| Total non-financial liabilities | 562.33 | 471.95 | 298.47 | 253.01 |
| EQUITY | ||||
| Equity share capital | 890.85 | 890.31 | 889.08 | 879.22 |
| Instruments entirely equity in nature | 826.46 | 826.46 | 826.46 | 826.46 |
| Other equity | 19,565.35 | 17,837.49 | 15,675.24 | 14,117.47 |
| Equity attributable to the equity holder of the Holding company | 21,282.66 | 19,554.26 | 17,390.78 | 15,823.15 |
| Non-controlling interest (NCI) | 1,104.35 | 1,123.04 | 930.34 | 906.02 |
| Total equity | 22,387.01 | 20,677.30 | 18,321.12 | 16,729.17 |
| Total liabilities and equity | 1,03,711.59 | 93,715.72 | 79,741.16 | 56,971.65 |
Northern Arc Capital Profit and Loss Statement
| Particulars | For the six months period ended September 30, 2023 | For the year ended March 31, 2023 | For the year ended March 31, 2022 | For the year ended March 31, 2021 |
|---|---|---|---|---|
| Revenue from operations | ||||
| Interest income | 7,575.21 | 11,483.88 | 7,808.45 | 5,798.64 |
| Fee and commission income | 335.92 | 856.16 | 860.45 | 643.35 |
| Net gain on fair value changes | 303.64 | 506.25 | 426.49 | 369.72 |
| Net gain on derecognition of financial instruments | 165.93 | 203.42 | – | – |
| Total revenue from operations | 8,380.70 | 13,049.71 | 9,095.39 | 6,811.71 |
| Other income | 68.08 | 62.29 | 70.06 | 41.16 |
| Total income | 8,448.78 | 13,112.00 | 9,165.45 | 6,852.87 |
| Expenses | ||||
| Finance costs | 3,383.27 | 5,574.49 | 4,106.72 | 3,229.68 |
| Fees and commission expense | 789.67 | 1,214.20 | 527.32 | 285.22 |
| Employee benefits expenses | 1,112.60 | 1,489.25 | 979.42 | 622.44 |
| Impairment on financial instruments | 451.20 | 392.14 | 365.09 | 1,354.09 |
| Depreciation and amortisation | 76.35 | 120.44 | 95.76 | 67.40 |
| Other expenses | 639.12 | 1,090.50 | 607.25 | 294.07 |
| Total expenses | 6,452.21 | 9,881.02 | 6,681.56 | 5,852.90 |
| Restated profit before share of profit/loss of associate and taxes | 1,996.57 | 3,230.98 | 2,483.89 | 999.97 |
| Share of loss from Associates | (10.57) | (18.73) | – | – |
| Restated Profit before tax | 1,986.00 | 3,212.25 | 2,483.89 | 999.97 |
| Tax expense | ||||
| Current tax | 471.83 | 970.23 | 505.02 | 421.75 |
| Adjustment of tax relating to earlier periods | 2.55 | – | – | – |
| Less: MAT Credit entitlement | (0.19) | – | – | – |
| Deferred tax charge/ (benefit) | 10.94 | (180.12) | 159.49 | (187.74) |
| Total Tax expense | 485.13 | 790.11 | 664.51 | 234.01 |
| Restated Profit for the year/period (A) | 1,500.87 | 2,422.14 | 1,819.38 | 765.96 |
| Other comprehensive income | ||||
| Remeasurement gain / (loss) on defined benefit plans | 3.35 | 8.07 | (19.53) | 4.85 |
| Income tax relating to items that will not be reclassified to profit | (0.84) | (2.66) | 4.91 | (1.23) |
| Total of items that will not be reclassified | 2.51 | 5.41 | (14.62) | 3.62 |
| Items that will be reclassified to profit or loss | ||||
| Net gain/ (loss) on Financial Instruments through OCI | 140.26 | (90.00) | (198.17) | 100.09 |
| Income tax relating to items that will be reclassified | (33.08) | 14.07 | 34.66 | (33.47) |
| Net gain/ (loss) on effective portion of cash flow hedges | 10.12 | (101.08) | (209.24) | (51.08) |
| Restated total comprehensive income for the year/period (A+B) | 1,618.13 | 2,275.98 | 1,484.68 | 797.98 |
| Restated Profit for the year/period attributable to | ||||
| Owners of the holding company | 1,442.06 | 2,300.11 | 1,725.00 | 675.18 |
| Non-controlling Interest | 58.81 | 124.23 | 94.38 | 90.78 |
| Restated earnings per equity share of INR 10 each | ||||
| Basic (in rupees) | 16.19 | 25.85 | 19.52 | 7.71 |
| Diluted (in rupees) | 10.97 | 17.38 | 13.09 | 5.35 |
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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.
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 57 | ₹14,991 |
| Retail (Max) | 13 | 741 | ₹194,883 |
| S-HNI (Min) | 14 | 798 | ₹209,874 |
| S-HNI (Max) | 66 | 3,762 | ₹989,406 |
| B-HNI (Min) | 67 | 3,819 | ₹1,004,397 |
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.
Anchor ListThese 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.
| Northern Arc Capital Limited Contact Details | Northern Arc Capital IPO Registrar |
| RHP | DRHP |
| Northern Arc Capital Limited No. 1, Kanagam Village 10th Floor, 10th Floor, IITM Research Park Taramani, Chennai – 600 113 Phone: +91 44 6668 7000 Email: investors@northernarc.com Website: http://www.northernarc.com/ | Kfin Technologies Limited Phone: 04067162222, 04079611000 Email: nacl.ipo@kfintech.com Website: https://kosmic.kfintech.com/ipostatus/ |
