Northern Arc Capital IPO Subscribed Nearly 90 Times on Day 3; Retail Portion Booked 30x

Northern Arc Capital’s initial public offering (IPO) garnered a massive response from investors on the third and final day of bidding, with the issue being subscribed nearly 90 times by 3:45 PM on September 19, 2024. The IPO received bids for 190.82 crore equity shares against the 2.14 crore shares on offer, showcasing significant demand, particularly from qualified institutional buyers (QIBs).

The QIB portion was subscribed 169.70 times, while non-institutional investors (NIIs) bid 134.51 times the allotted quota. Retail investors also participated enthusiastically, with their portion subscribed 28.98 times.

In the grey market, Northern Arc Capital's shares were trading at a premium of ₹145 per share, indicating strong market sentiment even amid broader market volatility.

Northern Arc Capital, a Chennai-based non-banking financial company (NBFC), had set a price band of ₹249-263 per share for its IPO. At the upper end of the price range, the company is expected to achieve a post-listing market capitalization of ₹4,244 crore.

The IPO consists of a fresh issue of equity shares worth ₹500 crore, along with an Offer For Sale (OFS) of 1.05 crore equity shares. The proceeds from the fresh issue will be utilized to meet the company’s future capital requirements, particularly for onward lending.

Registered with the Reserve Bank of India (RBI) as a systemically important NBFC, Northern Arc Capital has been a key player in the financial inclusion sector for over a decade. The company’s business model is diversified across various offerings, sectors, products, geographies, and borrower segments. It plays a pivotal role in providing credit access to underserved households and businesses, either directly or through partnerships with originators.

Northern Arc Capital initially filed draft papers with SEBI in July 2021 to launch its maiden public issue. While the company received regulatory approval in September of the same year, it delayed the IPO launch until now.

For the financial year ending March 31, 2024, Northern Arc Capital reported a 45% increase in revenue and a 31% rise in profit after tax (PAT) compared to the previous fiscal year.

ALSO READ| Arkade Developers IPO Subscribed Nearly 70 Times on Day 3; GMP Surges Amid Strong Demand

ICICI Securities, Axis Capital, and Citigroup Global Markets India are the book-running lead managers for the issue, with Kfin Technologies Limited acting as the registrar. The allotment for Northern Arc Capital’s IPO is expected to be finalized on September 20, 2024, with a tentative listing date set for September 24, 2024, on both BSE and NSE.