Bumper Listing: Northern Arc Capital Makes Stellar Debut On Exchanges At 34% Premium From IPO Price

Northern Arc Capital made a strong entry into the stock market today, with its shares listing at a strong premium over the issue price. Despite falling short of grey market expectations, the IPO debut was still a significant success.

Northern Arc Capital's shares were listed at Rs 351 per share on the Bombay Stock Exchange (BSE), which represents a 33.5% premium over the issue price of Rs 263 per share. This impressive listing delighted investors, as the share price showed substantial gains from the outset. However, the listing gains fell short of grey market estimates, which had anticipated a premium of nearly 50%.

Northern Arc Capital IPO Details

Northern Arc Capital's Rs 777 crore public offer received overwhelming investor interest, resulting in a massive oversubscription. The IPO, which was open for public subscription over three days, consisted of both a fresh issue and an offer for sale (OFS). Here's a closer look at the details:
Fresh Issue: The company issued equity shares worth Rs 500 crore.
Offer for Sale (OFS): Existing investor shareholders offered up to 1,05,32,320 equity shares, valued at Rs 277 crore at the upper end of the price band.

The total IPO was oversubscribed by 110.71 times, indicating high demand across different investor categories. Qualified Institutional Buyers (QIBs) subscribed 240.79 times, Non-Institutional Investors (NIIs) were not far behind, subscribing to the offer 142.28 times, and Retail Individual Investors (RIIs) also showed significant interest, with a subscription rate of 30.74 times. The company had earlier raised Rs 229 crore from anchor investors.

Northern Arc Capital is a non-deposit-taking NBFC registered with the Reserve Bank of India (RBI) as a systemically important entity. The company has been an active player in the financial inclusion space for over a decade. It operates with a broad business model, catering to multiple offerings across various sectors, products, geographies, and borrower segments.

The company focuses on facilitating access to credit for underserved households and businesses, both directly and through partnerships with originators. Northern Arc Capital's business spans across diverse financial sectors, including microfinance, small business loans, affordable housing finance, vehicle finance, and consumer finance.

The funds raised through the fresh issue of the IPO will be used for several strategic purposes, including:
Augmenting the company's capital base: This will enable Northern Arc Capital to expand its lending portfolio and strengthen its financial position, allowing it to cater to more underserved borrowers and businesses.
General corporate purposes: The capital will also provide the company with the financial flexibility to pursue its expansion plans and enhance its operations in the rapidly growing NBFC sector.

By deploying these funds strategically, Northern Arc Capital aims to reinforce its position as a leader in providing credit access and financial services to a wide range of clients, including low-income households, small and medium enterprises, and emerging businesses.