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Northern Arcs Upcoming IPO: Raising Rs.500 Crore for Growth and Expansion

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12 Sep 20246 mins readBy MOFSL

Northern Arc, a leading diversified financial services platform, has received approval from the Securities and Exchange Board of India (SEBI) for its upcoming Initial Public Offering (IPO). The company, known for its mission of catering to the underserved households and businesses in India, aims to raise significant capital to further strengthen its offerings and expand its reach across the country.

IPO Details: A Mix of Fresh Issue and Offer for Sale

The Northern Arc IPO will consist of a fresh issue of equity shares worth up to ₹500 crore along with an Offer for Sale (OFS) of 1.05 crore equity shares by existing investors. Key selling shareholders include LeapFrog Financial Inclusion India, Accion Africa-Asia Investment Company, 360 ONE Special Opportunities Fund, and a few other investors. This blend of new equity and existing shares will provide Northern Arc with capital for growth, while offering current investors an opportunity to partially exit.

Northern Arc Capital Ltd.

Offer Opens On

16th Sept. 2024

Offer Closes On

19th Sept. 2024

Fresh Issue

₹ 500 Cr

Offer for Sale

1,05,32,320 equity shares

Price Band

₹ 249 - 263

Bid Lot

57 Shares and in multiple thereof

Post Issue Implied Market Cap

₹ 4,045 Cr - ₹ 4,244^ Cr

Listing

BSE and NSE

Indicative Post Issue Timeline

Finalisation of Allotment - On or about 20-09-2024

Initiation of refunds - On or about 23-09-2024

Listing of the Equity shares - On or about 24-09-2024

Purpose of the IPO: Expanding Reach and Enhancing Brand

The net proceeds from the IPO will primarily be used to meet the company’s future capital requirements for onward lending, allowing Northern Arc to extend its reach to more underserved households and businesses. Additionally, the company aims to benefit from its public listing by enhancing its brand visibility and establishing a public market for its equity shares in India. This move is expected to boost Northern Arc’s credibility, enabling it to further strengthen its market position.

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About Northern Arc: A Leader in Financial Inclusion

Established in 2009, Northern Arc has positioned itself as a key player in India’s financial inclusion space. The platform focuses on meeting the diverse credit requirements of underserved households and businesses across India. Since its inception, Northern Arc has facilitated financing of over ₹1.50 trillion, impacting more than 80.59 million lives as of September 30, 2023.

According to the CRISIL Report, Northern Arc ranks among the top diversified Non-Banking Financial Companies (NBFCs) in India based on Assets Under Management (AUM) as of March 31, 2023. The company's business model spans multiple sectors, geographies, and borrower categories, ensuring a broad and inclusive approach to financial services.

 

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Financial Performance and Market Standing

Northern Arc’s strong position in the market is further supported by its diversified product offerings and robust financial performance. As of March 2023, the company boasts a well-rounded business model with a healthy portfolio of loans, ensuring steady growth in its Assets Under Management.

The company’s consistent focus on financial inclusion and innovative solutions has enabled it to serve a diverse range of customers, from small businesses to households in need of accessible credit. The upcoming IPO will help Northern Arc continue this mission, while also broadening its market presence and financial capacity.

Lead Managers for the IPO

Northern Arc’s IPO will be managed by top-tier financial institutions such as ICICI Securities, Axis Capital and Citi whereas Kfin Technologies is acting as registrar for ensuring smooth execution and strategic support throughout the offering process.

Conclusion: A Key Milestone in Northern Arc's Growth Journey

As Northern Arc gears up for its IPO, the company is poised to take its mission of financial inclusion to the next level. With the fresh infusion of capital from the public offering, Northern Arc aims to expand its lending capacity, increase its reach, and continue driving financial inclusion across India. The listing will also elevate the company’s brand visibility and enable it to access a broader range of resources to support its future growth initiatives.

This IPO marks a significant step in Northern Arc's journey, further solidifying its position as a leader in India's diversified NBFC sector and reinforcing its commitment to empowering underserved communities.

 

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