Northern Arc Capital IPO Overview
Northern Arc Capital’s Initial Public Offering (IPO) has garnered unprecedented interest from investors, showcasing strong subscription numbers. As of the final day of subscription, the IPO has been oversubscribed by an impressive 110.91 times, with total bids reaching approximately 238.22 crore shares against an offer of 2.14 crore shares. The company aims to raise Rs 777 crore through this IPO, with a price band set between Rs 249 and Rs 263 per share.
Subscription Breakdown
| Investor Category | Subscription Rate |
|---|---|
| Qualified Institutional Buyers (QIBs) | 240.79 times |
| Non-Institutional Investors (NII) | 142.41 times |
| Retail Investors | 31.08 times |
| Employees | 7.33 times |
| Total Subscription | 110.91 times |
IPO Details
The Northern Arc Capital IPO is open for investment from September 16 to September 19, 2024. The company offers shares in lots of 57, with a discount of Rs 24 per share for employees. The allotment of shares will be conducted on September 20, with trading expected to commence on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on September 24. The registrar managing the issue is Kaffin Tech.
Capital Structure
In this IPO, Northern Arc Capital plans to issue new shares worth Rs 500 crore. Additionally, it will offer 1,05,32,320 shares with a face value of Rs 10 under the Offer for Sale option. Proceeds from the Offer for Sale will go to the selling shareholders, while funds raised through new shares will be utilized for capital requirements related to loan distribution.
Grey Market Premium (GMP)
The IPO has seen substantial demand in the grey market, currently trading at a premium of Rs 145. This suggests that the company’s shares could list at approximately Rs 408, representing a potential 55% profit for investors if this trend continues. However, it is worth noting that the GMP has experienced a decline compared to previous values.
About Northern Arc Capital
Founded in 2009, Northern Arc Capital specializes in providing retail loans, focusing particularly on Micro, Small, and Medium Enterprises (MSMEs), microfinance institutions (MFIs), consumer finance, vehicle finance, affordable housing finance, and agricultural finance. The company boasts 15 years of experience in MSME finance and 9 years in consumer finance.
Financial Performance
Northern Arc Capital’s financial health has shown a consistent upward trajectory. In the fiscal year 2022, its net profit was Rs 181.94 crore, which grew to Rs 242.21 crore in FY 2023, reaching Rs 317.69 crore in FY 2024. During this period, the company’s revenue experienced a compound annual growth rate (CAGR) exceeding 44%, totaling Rs 1,906.03 crore. This demonstrates the company’s robust growth and effective business strategy in the financial sector.
