Northern Arc Capital’s Initial Public Offering (IPO) has seen an overwhelming response from investors, with the issue being subscribed 20.18 times by the third day of subscription. The company, which is looking to raise ₹777 crore through this IPO, is offering shares in the price range of ₹249-₹263 per share. The subscription window remains open until September 19 for those still interested in investing.
Breakdown of Investor Categories
The strong subscription numbers are a clear indication of the demand across different categories of investors. Here’s how the various segments responded:
- Qualified Institutional Buyers (QIB): Subscribed 0.31 times
- Non-Institutional Investors (NII): Subscribed a massive 50.80 times
- Retail Investors: Subscribed 18.97 times
- Employees: Subscribed 4.32 times
(Source: BSE, as of 18 September 2024)
This high subscription rate shows the keen interest from both retail and non-institutional investors, with the latter category leading the charge.
Key Details About the Northern Arc Capital IPO
The Northern Arc Capital IPO, which opened for subscription on September 16, offers shares in lots of 57 shares each. The final allotment of shares will be completed by September 20, with the shares set to be listed on the BSE and NSE on September 24.
Employees are being offered a discount of ₹24 per share, making it an attractive option for those within the company.
Out of the ₹777 crore, ₹500 crore will be raised through the issuance of fresh shares, while the rest comes through the Offer for Sale (OFS), where 1,05,32,320 shares are being sold. Funds raised from the fresh shares will be directed towards the company’s capital needs for expanding its loan distribution business, while the proceeds from the OFS will go to the shareholders selling their stakes.
Grey Market Premium (GMP) and Investor Sentiment
There has been strong interest in the grey market for Northern Arc Capital’s shares, reflecting the overall enthusiasm for this IPO. The shares are currently trading at a premium of ₹168 in the grey market, suggesting a potential listing price of around ₹431 per share. This would represent a 63.88% return for investors, although the GMP has slightly decreased compared to the previous day.
Understanding Northern Arc Capital
Northern Arc Capital, established in 2009, is focused on providing retail loans, especially to underserved sectors like MSMEs, microfinance (MFI), consumer finance, and more. With 15 years of experience in MSME financing and 9 years in consumer finance, the company has positioned itself as a major player in the financial sector.
The financial growth of Northern Arc Capital has been impressive. Its net profit jumped from ₹181.94 crore in FY22 to ₹242.21 crore in FY23, and further soared to ₹317.69 crore in FY24. The company’s revenue growth has also been remarkable, with a compound annual growth rate (CAGR) of over 44%, reaching ₹1,906.03 crore in the last financial year.
Final Thoughts on Northern Arc Capital IPO
With the IPO being oversubscribed and a promising future outlook, Northern Arc Capital is expected to continue its growth trajectory, making this an interesting opportunity for investors seeking exposure to the financial services sector. Those looking to invest still have time, as the issue closes on September 19.
(Disclaimer: Stock investments are subject to risks. Always consult with a financial expert before making any investment decisions.)
