Northern Arc Capital IPO: A Closer Look

Northern Arc Capital Ltd., a leading non-banking financial company (NBFC) specializing in SME financing, is set to make its market debut through an Initial Public Offering (IPO). This blog post will provide a comprehensive analysis of the IPO, covering its key details, investment highlights, risks, and potential returns.

Table of Contents

IPO Details

The Northern Arc Capital IPO is currently open for subscription from September 16, 2024 to September 19, 2024. The price band for the IPO is set at ₹249 – ₹263 per share. The company aims to raise ₹777 crore through a combination of fresh equity shares and an offer for sale. The tentative listing date is September 24, 2024.

Subscription Period: September 16-19, 2024
Allotment Date: September 20, 2024
Refund Initiated: September 23, 2024

Here’s a comprehensive tabular representation of Northern Arc Capital IPO details based on the information available up to September 16, 2024:

Aspect	Details
IPO Open Date	September 16, 2024
IPO Close Date	September 19, 2024
Allotment Date	September 20, 2024
Refund Initiation	September 23, 2024
Credit of Shares	September 23, 2024
Listing Date	September 24, 2024
Price Band	₹249 – ₹263 per share
Issue Size	₹777 Crores
Fresh Issue	₹500 Crores
Offer for Sale (OFS)	₹277 Crores
Lot Size	57 Shares
Minimum Investment	₹14,991 (based on the lower price band)
Book Running Lead Managers	ICICI Securities Limited, Axis Bank Limited, Citigroup Global Markets India Private Limited
Registrar	Kfin Technologies Limited
Retail Quota	35%
QIB Quota	50%
HNI Quota	15%
GMP (Grey Market Premium)	₹60 (as of recent updates)
Purpose of Issue	To augment the company’s capital base, meet future capital requirements, etc.
Founded	2009

This table provides a detailed overview of the Northern Arc Capital IPO, covering key dates, financial specifics, and company highlights for potential investors.

A Closer Look at Northern Arc Capital

Northern Arc Capital has established itself as a leading player in the SME financing space. With a focus on providing tailored financial solutions, the company has helped countless businesses grow and succeed. Their expertise and commitment to customer satisfaction have earned them a strong reputation in the industry.

Financial Metric	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets (₹ Crore)	11,707.66	9,371.57	7,974.12
Revenue (₹ Crore)	1,906.03	1,311.2	916.55
Profit After Tax (₹ Crore)	317.69	242.21	181.94
Net Worth (₹ Crore)	2,314.35	1,955.39	1,739.04
Reserves and Surplus (₹ Crore)	2,123.37	1,784.22	1,555.3
Total Borrowing (₹ Crore)	9,047.76	7,034.57	5,982.96

Northern Arc Capital IPO GMP and Subscription

Based on the latest information available up to September 18, 2024, here’s an overview of Northern Arc Capital’s IPO regarding its Grey Market Premium (GMP) and subscription status:

Grey Market Premium (GMP): The GMP for Northern Arc Capital’s IPO has been reported to be around ₹202 to ₹203, indicating a significant premium over the issue price. This translates to an expected listing gain of approximately 76.81% to 77% from the upper price band of ₹263, showcasing strong market optimism.
Subscription Status:
- By the third day of its subscription, the IPO was subscribed over 21 times, with a particularly high interest from non-institutional investors and retail investors.
- Specifically, non-institutional investors showed the highest interest, with subscription rates reported as high as 52.98 times, while retail investors subscribed around 19.93 times.
- Qualified Institutional Buyers (QIBs) had a lower subscription rate, around 0.32 times, indicating less enthusiasm or perhaps strategic holding back by institutional investors.
Market Sentiment: From posts on X and other platforms, there’s a clear bullish sentiment towards Northern Arc Capital’s IPO. Discussions highlight the GMP, subscription multiples, and expected listing gains, reflecting high investor confidence or speculative interest in the IPO’s performance.

Why Invest in Northern Arc Capital?

Strong Growth Prospects: The company has consistently demonstrated impressive growth in its loan portfolio and profitability, reflecting the increasing demand for SME financing.
Experienced Leadership: Northern Arc Capital is led by a seasoned management team with a proven track record in the financial services industry.
Diverse Clientele: The company serves a wide range of industries and regions, reducing its exposure to any single sector and enhancing its resilience.

Potential Risks and Challenges

While Northern Arc Capital presents an attractive investment opportunity, it’s essential to consider the potential risks involved. The NBFC sector is highly competitive, and the company faces competition from other financial institutions. Additionally, credit risk, which is the risk of borrowers defaulting on their loans, is a factor to consider. Regulatory changes could also impact the company’s operating environment.

Conclusion

The Northern Arc Capital IPO offers investors a chance to participate in the growth of a promising NBFC with a strong focus on SME financing. However, it’s crucial to conduct thorough research and consider the risks before making an investment decision. If you’re interested in exploring this opportunity, consider consulting with a financial advisor to get personalized advice.

Remember, investing involves risks, and past performance is not indicative of future results.