The initial public offering (IPO) of Northern Arc Capital will open for bidding on Monday, September 16 and the issue can be subscribed until Thursday, September 19. The company shall be offering its shares in the fixed price band of Rs 249-263 apiece, where investors can apply for a minimum of 57 equity shares and its multiples thereafter.
Chennai-based Northern Arc Capital was founded in 2009 and offers retail loans to underserved households and businesses in India. Its business model is diversified across different offerings, sectors, products, geographies, and borrower categories. It has facilitated over Rs. 1.73 lakh crore worth of financing, reaching out to over 10.18 crore people across India, as of March 31, 2024.
The IPO of Northern Arc Capital includes a fresh share sale of Rs 500 crore and an offer-for-sale (OFS) of up to 1,05,32,320 equity shares by its existing shareholders- Leapfrog Financial Inclusion India, Accion Africa-Asia Investment, 360 ONE Special Opportunities Fund, Eight Roads Investments, Dvara Trust and Sumitomo Mitsui Banking Corporation.
The company has reserved 5,90,874 equity shares for its eligible employees, who will get a discount of Rs 24 per share. 50 per cent of the net offer shall be reserved for qualified institutional bidders, while non-institutional investors will have 15 per cent of the allocation in the net offer. Retail investors will have 35 per cent of the net offer reserved for them.
At the upper end of the price band, Northern Arc Capital is looking to raise a total of Rs 775.58 crore via IPO. The net proceeds from the issue shall be utilized to meet future capital requirements toward onward lending. Anchor book for the issue will open on Friday, September 13.
Northern Arc Capital has expertise in lending across various focus sectors in India, especially in micro, small, and medium enterprise (MSME) finance, microfinance, consumer finance, vehicle finance, affordable housing finance and agriculture finance. It has been active in MSME finance for over 14 years, MFI finance for 15 years and consumer finance for nine years.
For the financial year ended on March 31, 2024, Northern Arc Capital reported a net profit of Rs 317.69 crore with a revenue of Rs 1,906.03 crore. The company had clocked a bottomline of Rs 242.21 crore with a revenue of Rs 1,311.2 crore for the fiscal year 2022-23.
ICICI Securities, Axis Bank and Citigroup Global Markets India are the book running lead managers of the Northern Arc Capital IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE, with September 24, Tuesday as the tentative date of listing.
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