Northern Arc Capital Limited is set to launch its IPO in September 2024, offering an exciting investment opportunity. The IPO consists of a book-built issue valued at ₹777 crore. It includes a fresh issue of 1.9 crore shares, aggregating ₹500 crore, along with an offer for sale of 1.05 crore shares, totaling ₹277 crore.
Investors can subscribe to the Northern Arc Capital IPO between September 16, 2024, and September 19, 2024. The allotment is expected to be finalised on September 20, 2024, with a listing on both the BSE and NSE on September 24, 2024. The price band for the IPO is set between ₹249 and ₹263 per share, with a minimum lot size of 57 shares for retail investors.
The issue has a special provision, offering up to 590,874 shares for employees at a discount of ₹24 per share. ICICI Securities Limited, Axis Bank Limited, and Citigroup Global Markets India Private Limited are the lead managers for the IPO, while Kfin Technologies Limited serves as the registrar.
Industry Outlook:
- The number of middle-income households in India is projected to rise from 41 million in 2012 to 181 million by 2030, at a CAGR of 9%. This increase in household income, especially in semi-urban and rural areas, will create more demand for retail and MSME financing.
- NBFC credit is expected to grow at 16%-18% CAGR between Fiscal 2024 and 2026, driven by retail sectors such as housing, auto, and microfinance.
Northern Arc Capital IPO Objectives
The company plans to allocate the net proceeds from the issuance to the following purposes:
- To raise capital to meet future lending requirements, supporting business expansion and growth.
- To enhance brand visibility and strengthen the company’s market presence in India.
- To ensure smooth implementation of growth plans.
About Northern Arc Capital Limited
Northern Arc Capital Limited is a diversified financial services platform that primarily addresses the retail credit needs of underserved households and businesses in India. Established with a focus on financial inclusion, the company has facilitated financing worth over ₹1.73 trillion, positively impacting more than 101 million lives across the country as of March 31, 2024.
According to the CRISIL report, Northern Arc ranks among India's leading non-banking financial companies (NBFCs) in terms of assets under management (AUM), offering a diversified portfolio across sectors like MSME financing, microfinance, and consumer finance.
The company operates through a multi-channel approach that includes lending, placements, and fund management, leveraging proprietary technology platforms such as Nimbus and nPOS to streamline the lending process. It extends credit directly to customers and through partnerships, covering 671 districts across India. Known for its efficient credit underwriting process, Northern Arc boasts one of the lowest non-performing asset ratios in the industry, reflecting its strong asset quality and risk management capabilities.
Peer Details
The following are the listed peers of Northern Arc Capital Limited:
- Five-Star Business Finance Limited
- SBFC Finance Limited
- Credit Access Grameen Limited
- Fusion Micro Finance Limited
- Bajaj Finance Limited
- Cholamandalam Investment and Finance Company Limited
- Poonawalla Fincorp Limited
- MAS Financial Services Limited
How to Check the Allotment Status of the Northern Arc Capital IPO?
Steps to check IPO allotment status on Angel One’s app:
- Log in to the Angel One app
- Go to the IPO Section and then to IPO Orders.
- Select the individual IPO that you had applied for and check the allotment status.
- Angel One will notify you of your IPO allotment status via push notification and email.
Contact Details of Northern Arc Capital IPO
- Registered office: No. 1, Kanagam Village, 10th Floor, IITM Research Park Taramani, Chennai 600 113, Tamil Nadu, India
- Phone: +91 44 6668 7000
- E-mail: investors@northernarc.com
IPO Financials
| Particulars | Year ending on March 31, 2024 | Year ending on March 31, 2023 |
|---|---|---|
| Revenue from Operation (in ₹ million) | 18,900.84 | 13,049.71 |
| Profit After Tax (PAT) (in ₹ million) | 3,176.93 | 2,422.14 |
| Net Worth (in ₹ million) | 23,143.49 | 19,553.90 |
| Earnings per Share (in ₹) | 34.61 | 25.85 |
| Average Cost of Borrowing (%) | 9.23 | 8.84 |
| Total Borrowings (in ₹ million) | 90,477.56 | 70,345.66 |
| EBITDA (in ₹ million) | 11,635.65 | 8,907.18 |
Know before investing
Strengths
6Northern Arc Capital serves a vast underpenetrated credit market in India.
The company’s strong sectoral expertise supports significant growth potential.
Rural and semi-urban markets offer large opportunities for credit expansion.
Northern Arc's diversified offerings target underserved sectors like MSME and MFI.
Technology-driven platforms streamline operations and enhance lending efficiency.
Extensive partner networks fuel liquidity access and broaden investment opportunities.
Risks
6Diversified business model exposes Northern Arc Capital to multiple sector risks.
Defaults by borrowers can increase NPAs, affecting cash flows.
Lack of identifiable promoters increases reliance on key management personnel.
The auditor's modifications may impact Northern Arc Capital's financial operations.
Unsecured investments pose higher risks, leading to potential write-offs.
Non-compliance with financing covenants could harm Northern Arc Capital's business.
