Northern Arc Capital’s ₹777 crore IPO has taken the market by storm, receiving an overwhelming response from all categories of investors. As of the final day of subscription on 19 September 2024, the issue was subscribed a remarkable 110.91 times. Investors placed bids for 238.22 crore shares against the 2.14 crore shares available.
The strong demand was led by Qualified Institutional Buyers (QIBs), Non-Institutional Investors (NIIs), and retail investors, ensuring the IPO’s resounding success. The price band for the shares was set between ₹249 and ₹263.
Breakdown of Northern Arc Capital IPO Subscription Figures: Major Participation from QIBs and NIIs
Investor demand was driven primarily by QIBs, who subscribed to the issue a staggering 240.79 times. Non-Institutional Investors followed suit with a subscription rate of 142.41 times, showcasing strong interest from high-net-worth individuals and corporations. Retail investors, who form the backbone of many successful IPOs, subscribed 31.08 times. Employees of Northern Arc Capital also contributed with a 7.33-times subscription, further underscoring confidence in the company’s growth potential.
- QIBs: 240.79 times
- NIIs: 142.41 times
- Retail Investors: 31.08 times
- Employees: 7.33 times
- Total: 110.91 times
These numbers reflect the broad appeal and confidence investors have in Northern Arc Capital’s growth story.
Important Dates and Allotment Details: Know When to Expect Share Allocation
Investors have shown keen interest in Northern Arc Capital’s IPO, and now the focus shifts to the allotment and listing dates. The allotment of shares will be finalized on 20 September 2024. After the allotment, the company’s shares will be listed on both BSE and NSE on 24 September 2024.
For those looking to invest, the IPO was available for subscription between 16 and 19 September, with a minimum lot size of 57 shares. Employees were offered a discount of ₹24 per share.
Use of Funds: Capital to Fuel Loan Distribution Expansion
Northern Arc Capital plans to use the proceeds from the IPO for its loan distribution and growth plans. Of the ₹777 crore IPO, ₹500 crore will be raised through fresh equity, while 1,05,32,320 shares will be sold through the Offer for Sale (OFS) window. The money from the OFS will go to the existing shareholders selling their stakes, while the funds from the new shares will help bolster the company’s capital base to meet its increasing demand for loans.
Grey Market Premium (GMP) Suggests Strong Potential for Investors
In the grey market, Northern Arc Capital’s shares are trading at a premium of ₹145 as of 19 September. Based on this premium, the shares are expected to list around ₹408, which could give investors a profit margin of around 55%. However, it’s important to note that the GMP has dipped slightly compared to the previous day, though it remains strong.
Northern Arc Capital’s Impressive Growth Story: Focus on MSMEs and Retail Lending
Established in 2009, Northern Arc Capital has carved a niche for itself by focusing on retail lending in sectors such as MSME (Micro, Small, and Medium Enterprises) finance, microfinance, consumer finance, vehicle loans, affordable housing finance, and agricultural finance. Over the last 15 years, it has become a trusted name, especially in MSME financing, while expanding its reach into consumer finance over the past 9 years.
The company’s financial performance has been stellar, with net profits rising steadily over the past few years. From ₹181.94 crore in FY 2022, the company’s net profit increased to ₹242.21 crore in FY 2023 and further jumped to ₹317.69 crore in FY 2024. Its revenue has also grown at an annual compounded rate of over 44%, reaching ₹1,906.03 crore in FY 2024.
With such impressive financials and market demand, Northern Arc Capital’s IPO has been a huge success and is now highly anticipated by investors eager for a profitable listing.
