Tue Sep 24 03:54:44 UTC 2024: ## Northern Arc Capital IPO Over-Subscribed, Set for Strong Listing
Chennai-based Northern Arc Capital Ltd., formerly known as IFMR Capital Finance, is set to make its debut on the stock market today. The IPO, which was priced at the upper end of the price band at ₹263, saw a robust response from investors, with subscriptions exceeding 110.70 times.
The IPO’s strong performance is attributed to the company’s strong position as a leading non-banking financial company (NBFC) specializing in retail loans. The grey market premium (GMP) currently stands at ₹144 (54.75%), further indicating high investor interest.
The quota for Qualified Institutional Buyers (QIBs) was subscribed 240.79 times, while non-institutional investors subscribed 142 times and retail investors nearly 31 times. Northern Arc Capital has already raised ₹229 crore from anchor investors.
The ₹777-crore IPO is a combination of a fresh issue of equity shares valued at ₹500 crore and an offer for sale (OFS) of up to 1,05,32,320 equity shares worth Rs 277 crore, by investor shareholders. Proceeds from the fresh issue will be used to meet future capital requirements of the company towards onward lending.
While Northern Arc Capital has demonstrated growth in revenue and profit, experts like Shivani Nyati, Head of Wealth at Swastika Investmart Ltd., highlight that challenges like negative cash flow and a high debt-to-equity ratio need to be considered.
The company, registered with the Reserve Bank of India (RBI) as systemically important, is a non-deposit-taking NBFC and has been operating in the financial inclusion space for over a decade. ICICI Securities, Axis Capital, and Citigroup Global Markets India are the book-running lead managers to the issue.
First Piper 