Northern Arc Capital Mobilises Rs 229 Crore from Anchor Investors Pre-IPO

Northern Arc Capital, a non-bank financial institution, has raised Rs 229 crore from anchor investors ahead of its public share-sale. The company allotted 87.02 lakh equity shares to 15 funds at Rs 263 each, the upper end of the price band. This transaction aggregates to Rs 229 crore.

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Anchor Investors and IPO Details

The anchor investors include SBI General Insurance Company, SBI Life Insurance Company, Reliance General Insurance Company, Kotak Mahindra Life Insurance Company, Goldman Sachs Singapore Pte, Societe Generale, and Quant Mutual Fund. The Rs 777-crore IPO will open for public subscription on September 16 and close on September 19. The price range is set between Rs 249 and Rs 263 per share.

Offer Structure and Use of Proceeds

The IPO consists of a fresh issue of equity shares worth Rs 500 crore and an Offer For Sale (OFS) of up to 10,532,320 equity shares valued at Rs 277 crore at the upper price band. The total issue size aggregates to Rs 777 crore. Proceeds from the fresh issue will be used to meet future capital requirements for onward lending.

Investors and Regulatory Approvals

Those offering shares through the OFS include Leapfrog Financial Inclusion India II Ltd, Accion Africa-Asia Investment Company, Eight Roads Investments Mauritius II Ltd, Sumitomo Mitsui Banking Corporation, 360 ONE Special Opportunities Fund (formerly known as IIFL Special Opportunities Fund), and Dvara Trust. Northern Arc Capital filed draft papers with Sebi in July 2021 and received regulatory approval in September the same year but delayed the launch.

Company Profile and Business Model

Registered with the RBI as a systemically important non-deposit taking NBFC, Northern Arc Capital has been operating in the financial inclusion space for over a decade. It provides credit access to under-served households and businesses directly and indirectly through Originator Partners. The company’s business model is diversified across offerings, sectors, products, geographies, and borrower segments.

Subscription Details

Investors can bid for a lot size of 57 equity shares and in multiples thereafter. ICICI Securities, Axis Capital, and Citigroup Global Markets India are the book-running lead managers for the issue.

Northern Arc Capital continues to be a leading player among diversified NBFCs in India. The company’s focus on financial inclusion has positioned it well within the sector.