Northern Arc Capital IPO: Price band set at ₹249-263 per share; check issue size, key dates, more.

Northern Arc Capital IPO price band: The Northern Arc Capital Limited IPO price band has been fixed in the range of ₹249 to ₹263 per equity share of the face value of ₹10. The Northern Arc Capital IPO date of subscription is scheduled for Monday, September 16, and will close on Thursday, September 19. The allocation to anchor investors for the Northern Arc Capital IPO is scheduled to take place on Friday, September 13.

The floor price and the cap price are 24.90 times and 26.30 times the face value of the equity shares, respectively. The price to earnings ratio based on diluted EPS for fiscal 2024 at the upper end of the price band is 11.24 times as compared to the average industry peer group PE ratio of 23.28 times. The Northern Arc Capital IPO lot size is 57 equity shares and in multiples of 57 equity shares thereafter.

Northern Arc Capital IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors. Eligible employees participating in the employee reservation portion will receive a discount of ₹24 per equity share, and this segment has up to 590,874 equity shares allocated to it.

Tentatively, Northern Arc Capital IPO basis of allotment of shares will be finalised on Friday, September 20, and the company will initiate refunds on Monday, September 23, while the shares will be credited to the demat account of allottees on the same day following refund. Northern Arc Capital share price is likely to be listed on BSE and NSE on Tuesday, September 24.

The firm was founded with the primary goal of meeting the various retail credit needs of India's underserved families and companies. It is a diversified financial services platform. Their strategy over the past 15 years has been to develop a unique and all-encompassing play on India's retail credit ecosystem across many industries. As of March 31, 2024, they had facilitated financing of over ₹1.73 trillion, impacting over 101.82 million people throughout India since they joined the financial inclusion field in 2009.

As per the red herring prospectus (RHP), the company's peers are Five-Star Business Finance Ltd (with a P/E of 26.76), SBFC Finance Ltd (with a P/E of 36.64), CreditAccess Grameen Ltd (with a P/E of 13.12), Fusion Micro Finance Ltd (with a P/E of 6.21), Bajaj Finance Ltd (with a P/E of 30.93), Cholamandalam Investment and Finance Company Ltd (with a P/E of 36.22), Poonawalla Fincorp Ltd (with a P/E of 17.81), and MAS Financial Services Ltd (with a P/E of 18.55).

Between March 31, 2024, and March 31, 2023, Northern Arc Capital Limited's profit after tax (PAT) climbed by 31% and revenue increased by 45%.

Northern Arc Capital IPO details

In addition to an offer for sale (OFS) of up to 1.05 crore shares by existing shareholdersand promoters, valued at ₹277 crore at the upper price band, the IPO also includes a new issuance of ₹500 crore. The offering is worth ₹777 crore in total.

The company plans to use the net proceeds for meeting future capital needs related to lending in the future.

The book running lead managers of the Northern Arc Capital IPO are ICICI Securities Ltd, Axis Bank Ltd, and Citigroup Global Markets India Private Ltd. The registrar of the issue is Kfin Technologies Ltd.

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