Northern Arc Capital is set to make its much-anticipated debut on the stock exchanges. Investors are eagerly awaiting the listing, which is projected to deliver significant gains. The initial public offering (IPO) of Northern Arc Capital was open for subscription from September 16 to September 19, 2024, and it has garnered remarkable interest from investors.
The IPO was offered in a price band of ₹249 to ₹263 per share, with a minimum investment requirement of approximately ₹14,991 for one lot of 57 shares. The total issue size was around ₹777 crore, consisting of a fresh issue and an offer for sale. The company raised ₹500 crore through the fresh issue and offered up to 1.05 crore shares for sale.
Main Points
Northern Arc Capital IPO Subscription Details
The response to the IPO was overwhelming, with an overall subscription rate of 110.91 times by the closing date. This included a staggering 240.79 times subscriptions from Qualified Institutional Buyers (QIBs), 142.41 times from Non-Institutional Investors (NIIs), and 31.08 times from Retail Individual Investors (RIIs). Such high levels of interest indicate strong market confidence in Northern Arc Capital’s business model and future prospects.
Grey Market Premium
As of today, Northern Arc Capital’s shares are trading at a substantial grey market premium (GMP) of approximately ₹144, suggesting that they may list around ₹407 per share on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). This represents an expected listing gain of nearly 55% from the upper end of the issue price. Although the GMP has seen slight fluctuations—dropping from ₹178 earlier this month—it remains significantly higher than the ₹128 recorded when the subscription closed.
Northern Arc Capital Company Overview
Founded in 2009, Northern Arc Capital operates as a diversified financial services platform aimed at providing credit solutions to underserved households and businesses across India. The company is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC). Over its 14 years of operation, Northern Arc has facilitated financing worth over ₹1.73 lakh crore, reaching more than 10.18 crore people.
The firm focuses on various sectors including micro, small, and medium enterprises (MSMEs), microfinance institutions (MFIs), consumer finance, vehicle finance, affordable housing finance, and agricultural finance. This diversified approach allows it to cater to a wide range of credit requirements.
Future Prospects
Northern Arc Capital plans to utilize the proceeds from its IPO to meet future capital requirements for onward lending in its targeted sectors. The company aims to ensure compliance with RBI regulations regarding capital adequacy for the upcoming financial year.
Analysts have expressed optimism about Northern Arc’s prospects post-listing. Prathamesh P Masdekar, a research analyst at StoxBox, noted that investors should consider holding their positions for medium to long-term gains given the company’s robust fundamentals and positive market response.
Shivani Nyati, Head of Wealth at Swastika Investmart, echoed this sentiment by stating that the IPO’s valuation appeared reasonable and that the overwhelming investor interest suggests a promising debut.
Northern Arc Capital Important Levels to Watch
Investors are advised to keep an eye on key levels today:
- Issue Price: ₹263
- Expected Listing Price: ₹407
- Grey Market Premium: ₹144
These figures highlight not only the potential for immediate gains but also reflect investor confidence in Northern Arc Capital’s long-term growth trajectory.
