Mon Sep 16 10:24:37 UTC 2024: ## Northern Arc Capital IPO Opens With Strong Subscription

**Mumbai, India:** The initial public offering (IPO) of Northern Arc Capital Ltd, a leading non-bank financial institution, opened for public subscription on Monday, September 16th, with strong initial demand.

The IPO, aiming to raise Rs 777 crore, has a price band of Rs 249 to Rs 263 per share. By the afternoon, it had garnered a 2.17 times subscription, with bids for 4,40,09,073 shares against the 2,03,04,754 shares on offer. The category for non-institutional investors received 2.80 times subscription, while the retail individual investors (RIIs) portion got subscribed 3.10 times.

The IPO will remain open for public subscription until September 19th, with the share allotment likely to be finalized on September 20th. The company’s shares are expected to be listed on both BSE and NSE on September 24th.

**Strong Market Sentiment:**

Market observers are optimistic about Northern Arc’s IPO, with unlisted shares trading at a Rs 158 premium in the grey market, indicating a potential 60.08% listing gain. This “grey market premium” reflects investors’ eagerness to pay above the issue price.

**Analyst Recommendations:**

Multiple brokerage houses have given a “subscribe” recommendation for the IPO, citing Northern Arc’s strong performance and growth prospects. Anand Rathi highlights the company’s significant contribution to the Indian retail credit market, having facilitated financing of over Rs 1.73 trillion since 2009. Nirmal Bang points to Northern Arc’s well-positioned growth, leverage of digital platforms, and strong partner ecosystem, while SBI Securities emphasizes the company’s robust network of originators, lending partners, and investors.

**Anchor Investment:**

Prior to the IPO opening, Northern Arc successfully raised Rs 229 crore from anchor investors, including prominent institutions like SBI General Insurance, SBI Life Insurance, Reliance General Insurance, and Goldman Sachs.

**IPO Details:**

The IPO is a combination of a fresh issue of equity shares worth Rs 500 crore and an Offer For Sale (OFS) of up to Rs 277 crore by existing shareholders. Proceeds from the fresh issue will be used for future capital requirements and onward lending.

Northern Arc, registered with the Reserve Bank of India as a systemically important NBFC, has been a prominent player in the financial inclusion space for over a decade. Its diversified business model across offerings, sectors, products, geographies, and borrower segments has enabled it to provide credit access to underserved households and businesses.

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