Northern Arc Capital's IPO in India: A Major Fundraising Milestone

Northern Arc Capital, a prominent non-bank financial institution (NBFI) in India, has achieved a significant milestone in its journey towards a successful initial public offering (IPO). The company has successfully raised INR 229 crore from anchor investors, a crucial development just days before the IPO's launch.

Key Anchor Investors in the Pre-IPO Funding Round

The anchor investor round saw participation from leading financial institutions across India. These include:

• SBI General Insurance Company
• SBI Life Insurance Company
• Reliance General Insurance Company
• Kotak Mahindra Life Insurance Company
• Goldman Sachs (Singapore) Pte
• Societe Generale
• Quant Mutual Fund

This strong interest from prominent investors reflects confidence in Northern Arc's business model and its potential for growth in the Indian financial services sector.

Details of the Anchor Investment Allocation

As per a circular published on the Bombay Stock Exchange (BSE), Northern Arc allotted 87.02 lakh equity shares to 15 funds. The allocation was made at INR 263 per share, marking the upper limit of the company's designated price band (INR 249 to INR 263 per share). This resulted in a total transaction value of INR 229 crore.

Structure of the INR 777 Crore IPO

The upcoming INR 777 crore IPO of Northern Arc Capital is a blend of fresh equity issuance and an Offer for Sale (OFS) by the company's existing shareholders. The IPO includes:

• A fresh issue of shares worth INR 500 crore
• An OFS of up to 10,532,320 equity shares, valued at INR 277 crore at the upper price band

IPO Timeline and Lead Managers

The IPO is scheduled to open for public subscription on September 16 and will continue until September 19, allowing retail and institutional investors to participate in Northern Arc's market debut. ICICI Securities, Axis Capital, and Citigroup Global Markets India will act as the book-running lead managers for this significant IPO.

Investment Details and Minimum Lot Size

Investors can bid for a minimum lot size of 57 shares and in multiples thereafter, making the IPO accessible to a wide range of potential participants.

Utilization of IPO Proceeds

Northern Arc plans to use the proceeds from the fresh issuance to meet its future capital needs. This capital will primarily be used to support the company's onward lending business, enabling it to expand its reach and impact in the Indian financial services market.

Northern Arc Capital's Business Model and Focus

Northern Arc Capital stands out as a leading player in the Indian non-banking financial services space. Its diversified model caters to a broad spectrum of offerings, sectors, and borrower segments. The company's primary focus is on bridging the credit gap in India, providing access to financial services for underserved households and businesses.

Northern Arc's Network and Impact

Northern Arc achieves its mission through a network of Originator Partners, working closely with them to reach its target borrowers. This collaborative approach ensures that financial services reach those who need them most, driving positive impact within the Indian financial landscape.