Northern Arc Capital IPO in India

Northern Arc Capital, a diversified non-banking financial company (NBFC) headquartered in Chennai, India, is set to launch its initial public offering (IPO) on September 16, 2024.

• The IPO will offer a combination of fresh equity shares and an offer for sale (OFS).
• The IPO will remain open for public subscription until September 19, while anchor investors can participate on September 13.

IPO Details

The fresh issue is expected to raise INR 500 crore, while the OFS will involve the sale of 1.05 crore equity shares by selling shareholders, including LeapFrog Financial Inclusion India, Accion Africa-Asia Investment Company, and 360 ONE Special Opportunities Fund.

• The company has set a price band of INR 249-263 per share for the IPO, which is expected to raise a total of INR 777 crore.
• At the upper price band, Northern Arc's market capitalization is projected to be around INR 4,750 crore.
• ICICI Securities, Axis Capital, and Citigroup Global Markets India are the lead book managers for the issue, while KFin Technologies Limited is the official registrar.

Financial Inclusion in India

Northern Arc Capital plans to utilize the proceeds from the IPO to meet its capital requirements for onward lending, emphasizing its commitment to financial inclusion in India.

• The firm focuses on providing credit access to underserved households and businesses, both directly and indirectly, through its originator partners.
• Northern Arc's business model is spread across various sectors, products, regions, and borrower segments, ensuring its reach to the underbanked population.

Second IPO Attempt

This IPO marks Northern Arc's second attempt at going public. Previously, the company filed for an IPO in 2021 but failed to list within the approved timeframe of one year.

• The company's equity shares will be listed on both BSE and NSE.
• The stock is expected to debut on September 24.

Key Takeaways

Northern Arc Capital's upcoming IPO represents a significant step towards expanding its reach and contributing further to financial inclusion in India. The company's commitment to serving the underbanked population and its strong track record in the non-banking financial sector make this IPO a compelling opportunity for investors interested in India's growth story.

• The IPO is a positive development for the Indian stock market, particularly in the financial services sector.
• The success of Northern Arc's IPO could encourage other NBFCs to pursue similar initiatives, leading to further diversification and growth within the Indian financial landscape.