Northern Arc Capital Ltd, a prominent non-banking financial institution, is set to finalize the allotment of its initial public offering (IPO) that has garnered unprecedented interest from investors. The IPO, which opened for subscription on September 16 and closed on September 19, has been a significant event in the financial market, with a remarkable subscription rate that reflects strong investor confidence.
The IPO aimed to raise ₹777 crore and attracted bids for an astonishing 237.79 million shares against the 21.48 million shares available, leading to an overall subscription rate of approximately 110.71 times. This overwhelming response highlights the growing demand for shares in companies that cater to underserved markets in India.
Main Points
Northern Arc Capital IPO Subscription Breakdown
The subscription details reveal a diverse interest across different investor categories:
- Qualified Institutional Buyers (QIBs): This category saw an impressive subscription rate of 240.79 times, indicating robust backing from institutional investors.
- Non-Institutional Investors (NIIs): They subscribed at 142.28 times, showcasing a strong appetite among high-net-worth individuals and other institutional players.
- Retail Individual Investors (RIIs): The retail segment also showed significant enthusiasm with a subscription rate of 30.74 times.
This broad-based interest underscores the confidence in Northern Arc Capital’s business model and its potential for future growth.
Northern Arc Capital IPO Pricing and Grey Market Premium
The price band for the IPO was set between ₹249 to ₹263 per share. As of September 19, the grey market premium (GMP) for Northern Arc Capital shares stood at around ₹160, suggesting an expected listing gain of approximately 60.84% on the stock’s debut day. Investors are optimistic about the company’s performance post-listing, with projections estimating the shares could debut at around ₹418 based on current market sentiments.
Key Details of the IPO
The IPO comprises two components:
- Fresh Issue: The company is raising ₹500 crore through fresh equity shares.
- Offer For Sale (OFS): The remaining ₹277 crore is through an offer for sale by existing shareholders.
The proceeds from this IPO are intended to bolster Northern Arc’s capital base to support its lending activities in underserved markets across India. The company has been operational since 2009 and specializes in providing retail loans to households and businesses that often face barriers in accessing credit.
Company Background
Northern Arc Capital operates as a non-deposit taking non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI). It has established itself as a key player in India’s financial inclusion sector, facilitating over ₹1.73 trillion in financing and reaching more than 100 million people across the country.
The firm utilizes a diversified business model that spans various sectors and borrower segments, ensuring it meets the diverse credit needs of its clientele effectively. Its strategic partnerships with originator partners enhance its reach and operational efficiency.
Northern Arc Capital IPO Future Outlook
Analysts have been largely positive about Northern Arc Capital’s growth trajectory. Many brokerage firms have recommended subscribing to the IPO, citing factors such as:
- A strong asset quality track record with low non-performing assets.
- A solid return on assets (ROA) and return on equity (ROE), indicating efficient management and profitability.
- A well-established risk management framework supported by extensive data analytics.
As investors await the allotment results today, there is palpable excitement surrounding Northern Arc’s upcoming listing on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), scheduled for September 24, 2024.
Northern Arc Capital IPO How to Check Allotment Status
For those who applied for shares in this IPO, checking the allotment status is straightforward:
- Visit the official website of Kfin Technologies, which is managing the allotment process.
- Navigate to the ‘IPO’ section and select ‘Allotment Status’.
- Enter your application number and PAN details to view your allotment status.
With such a promising start and strong investor backing, Northern Arc Capital is poised to make a significant impact on India’s financial landscape as it continues to champion financial inclusion across various demographics.
