Northern Arc Capital IPO 2024 Highlights: Northern Arc Capital has listed on the exchanges on a strong note. The stock has listed with a strong 33% premium to issue price and the issue was subscribed 117.19 times. The company raised Rs 777 crore through a combination of fresh shares and an offer for sale.
The IPO was priced between Rs 249 – 263 per share, the IPO requires retail investors to apply for a minimum lot of 57 shares, translating to an investment of Rs 14,991. The book running lead managers of the Northern Arc Capital IPO are ICICI Securities Limited, Axis Bank Limited, and Citigroup Global Markets India Private Limited. The registrar of the issue is Kfin Technologies Limited.
Northern Capital IPO 2024 live updates: Northern Arc Capital lists at 33% premium
- Vast, underpenetrated market opportunity bolstered by significant sectoral expertise.
- Extensive network of partners, complemented by a robust data and technology platform that fosters strong network effects.
- Innovative proprietary technology suite reshaping the debt market ecosystem.
- Comprehensive risk management founded on domain expertise, proprietary risk models, and a rich data repository to enhance asset quality.
- Diversified funding sources facilitating our deployment strategies and proactive liquidity management.
- Professional management team supported by an experienced Board and esteemed investors, ensuring high standards of governance.
- Strong ESG framework embedded in the business model, emphasizing sustainable impact and climate-smart lending practices.
Northern Arc Capital has built a business model powered by a proprietary, fully integrated technology suite tailored to various sectors. Their in-house technology includes: (i) Nimbus, a specialized debt platform that facilitates end-to-end processing of debt transactions; (ii) nPOS, an API-based technology solution for co-lending and co-origination; (iii) Nu Score, a machine learning-driven analytics tool designed to assist originator partners in the loan underwriting process; and (iv) AltiFi, a platform offering alternative retail debt investment opportunities.
The company delivers its three core services—Lending, Placement, and Fund Management—through a proprietary technology platform that facilitates streamlined and efficient digital financing solutions. This platform enhances access to credit for India's underserved population, particularly in priority sectors.
With extensive experience in lending across key focus areas, the company specializes in financing for Micro, Small, and Medium Enterprises (MSMEs), Microfinance Institutions (MFIs), consumer finance, vehicle loans, affordable housing, and agriculture. The company has been a leader in MSME financing for over 14 years, MFI financing for 15 years, and consumer credit for nine years.
Northern Arc Capital has successfully raised Rs 777 crore through its public issue, which includes a fresh issuance of 1.9 crore equity shares worth Rs 500 crore and an offer for sale (OFS) of 1.05 crore shares valued at ₹277 crore. The company plans to allocate the proceeds from the fresh issue to fulfill future capital needs for its lending activities.
On Tuesday, Northern Arc Capital's shares closed at Rs 323.60 each, down 7.81% on the BSE.
On the financial front, the company reported consolidated net income of Rs 916 crore for FY22, Rs 1,311 crore for FY23, and Rs 1,906 crore for FY24. During the same period, net profit was Rs 182 crore, Rs 242 crore, and Rs 318 crore, respectively. As of FY24, NACL's assets under management (AUM) reached Rs 11,710 crore, reflecting AUM growth of 28.3% and profit growth of 32.1% over FY22-24. The company also achieved consistent improvements in return ratios, with Return on Equity (RoE) increasing from 9.9% to 13.3% and Return on Assets (RoA) rising from 2.6% to 3.0% during this period.
Northern Arc Capital has developed a business model, supported by proprietary end-to-end integrated technology product suite customized to multiple sectors. Their in-house technology includes: (i) Nimbus, a curated debt platform that enables end-to-end processing of debt transactions; (ii) nPOS, a co-lending and co-origination technology solution based on application programming interfaces (“API”); (iii) Nu Score, a customized machine learning based analytical module designed to assist our originator partners in the loan underwriting process; and (iv) AltiFi, an alternative retail debt investment platform.
Northern Arc Capital has developed a comprehensive retail credit ecosystem across multiple sectors and is recognized for having one of the lowest credit costs among diversified NBFCs in India. As of March 2024, it has facilitated financing exceeding Rs 1.73 trillion, positively impacting over 101.8 million lives across the country.
Commenting on Northern Arc Capital, Prashanth Tapse, Senior VP (Research), Mehta Equities said, "Listing of Northern Arc Capital was slightly below street expectation despite receiving healthy subscription response, as the market sentiment has been subdued since the opening trades. Post listing, we continue to believe that investors should continue to HOLD because of an opportunity to hold stake in a diversified financial services platform dedicated to addressing the retail credit needs of under-served households and businesses in India. "
He noted that the share is well-positioned for long-term sustained growth, attributing it to the company’s strong emphasis on MSME, microfinance, and consumer finance sectors.
The financial firms such as BP Equities, Canara Bank Securities, DIlip Davda, GEPL Capital, Hensex Securities, Indsec securities, KR Choksey Securities, Marwadi Shares and Finances, Nirmal Bang, SBICAP Securities, SMIFS and Ventura Securities have recommended the Northern Arc Capital IPO.
Total Equity shares 8,702,031 were allocated to Anchor Investors out of which 979,887 equity shares, which is 11.26 per cent of the total allocation to Anchor Investors. It was allocated to Quant Mutual Fund-Quant BFSI Fund, which is a domestic mutual fund applied through a total of one scheme.
Commenting on the Arkade Developers listing Anshul Jain, Head of Research, Lakshmishree Investment & Securities said that Northern Arc Capital made a strong debut on the stock market, listing with impressive gains of nearly 33%. Despite an initial selloff on high volumes post-listing, the overall performance has confirmed expectations of solid listing gains, as highlighted in our earlier analysis.
Jain also added that today's peak at Rs 350 will act as a key resistance level in the near future, signaling a crucial area for investors to watch. Going forward, the stock is expected to consolidate, potentially forming a stable IPO base. Investors should monitor price movements closely as Northern Arc Capital begins to establish its position in the market.
There were a total of fifteen anchor investors in the Northern Arc Capital IPO such as Quant Mutual Fund-BFSI fund, SBI Life Insurance, SBI General Insurance, Singularity equity fund, Kotak Mahindra Life Insurance, Goldman Sachs (Singapore), Reliance General Insurance and many others. The total amount allocated for shares by the Anchor Investors is Rs 228,86,34,153.
The Northern Arc Capital IPO was listed at NSE and BSE on September 24, 2024. The NSE Code of the Company is ‘NORTHARC 'and ‘544260’ for the BSE. The retail investors were offered not less than 35 per cent of the total share. As the minimum lot size was 57 shares, the IPO has offered Rs 4959.00 per lot return on listing.
The IPO was oversubscribed from the first day, September 16, 2024, was oversubscribed 3.08 times. September 17 also saw 10.61 times of oversubscription and 21.51 times on September 18. The subscription of the IPO was 117.19 times on September 19, 2024.
A total of 2,37,95,07,465 shares were bid for Northern Arc Capital IPO. The retail investors bid for 32,49,69,882 shares and Qualified Institutional Buyers bid for 1,40,81,33,928 shares. The Non-Institutional Investors (NII) bid for 64,21,24,665 shares, which is further divided into two Parts: small NIIs and big NIIs. The small NIIs bid for 17,66,31,030 shares and the big NIIs bid for 46,54,93,635 shares.
The total number of shares offered for the Northern Arc Capital IPO issuance was 2,03,04,754. Qualified Institutional Buyers were offered 58,01,354 shares, while Non-Institutional Investors were offered 43,51,016 shares. The Non-Institutional Buyers are divided into two categories: small NIIs, who were offered 14,50,338 shares, and large NIIs, who were offered 29,00,678 shares. Retail investors were offered 1,01,52,384 shares.
The lead book runner for the Northern Arc Capital IPO were ICICI Securities, Axis Bank and Citigroup Global Markets India. The Kfin Technologies was the registrar for the IPO Issue.
A retail participant was required to purchase a minimum of Rs 14,991 worth of shares, equivalent to 57 shares in total. The lot sizes for small and Big NIIs varied. Big NIIs required an investment of Rs 10,04,397, while small NIIs had to bid for a minimum of 14 lots, or Rs 2,09,874.
As per the information on NSE, the upper band today for Northern Arc Capital is Rs 420 and the lower band is Rs 280 with a price band of Rs 20. The intraday high and low on September 24 is Rs 350 and Rs 308.20.
Northern Arc Capital was listed at Rs 350 on the National Stock Exchange, a premium of 33 per cent to the previous close of Rs 263. The IPO was subscribed to a total of 117.19 times more than the offered shares.
Northern Arc Capital is a book-built issue IPO which is worth a total of Rs 777 crores. The issued IPO has 1.9 crores share as fresh issue amounting to Rs 500 crores and 1.05 cores as offer for sale equivalent to Rs 277 crores.