Northern Arc Capital’s IPO is witnessing an overwhelming response from investors as it enters its second day of subscription. As of September 17, 2024, the issue was subscribed 9.99 times against the shares available for sale. This strong investor demand reflects growing confidence in the company’s financial performance and growth prospects. The IPO, which aims to raise ₹777 crore, will remain open for subscription until September 19, 2024.
Subscription details and breakdown of investors
The IPO of Northern Arc Capital is seeing mixed responses from different investor categories. Here’s a breakdown of the subscription numbers:
- Qualified Institutional Buyers (QIBs): Subscribed 0.20 times
- Non-Institutional Investors (NIIs): Subscribed 21.72 times
- Retail Investors: Subscribed 10.84 times
- Employees: Subscribed 2.25 times
Overall, the IPO has been subscribed 9.99 times, showing strong interest from non-institutional and retail investors, while QIB participation has been comparatively lower.
Northern Arc Capital IPO: Key details
Investors can bid for Northern Arc Capital’s IPO within a price band of ₹249 to ₹263 per share. The minimum lot size for the IPO is 57 shares, making it accessible to both large and small investors. Employees of the company are entitled to a discount of ₹24 per share. The subscription window for this public issue opened on September 16 and will close on September 19, 2024.
IPO share allotment is scheduled for September 20, 2024, and the shares will be listed on the BSE and NSE on September 24, 2024. The registrar for this IPO is KFin Technologies, ensuring a smooth process for investors.
The company plans to raise ₹777 crore through this IPO, which includes ₹500 crore worth of new shares. Additionally, 1,05,32,320 shares will be sold through the Offer for Sale (OFS) window, benefiting the shareholders selling their stake. The proceeds from the fresh issue will be used to meet capital requirements for the company’s loan distribution activities.
Grey market demand and premium expectations
The IPO is also performing well in the grey market, with shares trading at a premium of ₹202 in the unlisted market. This suggests that Northern Arc Capital’s shares could be listed at ₹465, offering early investors a potential gain of 76% on the listing day. Such high premiums reflect the strong demand and optimism surrounding the company’s IPO.
About Northern Arc Capital
Founded in 2009, Northern Arc Capital specializes in providing retail loans, focusing on sectors like MSME (Micro, Small, and Medium Enterprises) finance, microfinance (MFI), consumer finance, vehicle finance, affordable housing, and agriculture finance. The company has been active in the MSME finance space for 15 years and in consumer finance for 9 years, gaining a solid foothold in these sectors.
Strong financial growth has been a key driver for investor interest. The company reported a net profit of ₹181.94 crore in FY22, which increased to ₹242.21 crore in FY23. In the latest financial year FY24, Northern Arc’s net profit surged to ₹317.69 crore, showcasing a consistent upward trend. Its revenue has grown at a compound annual growth rate (CAGR) of over 44%, reaching ₹1,906.03 crore in FY24.
With such impressive financials and a growing demand for its services, Northern Arc Capital is poised for significant growth in the coming years, making it an attractive option for investors.
