Northern Arc Capital Ltd
Complete IPO details, including price band, financials, subscription status, and key insights.
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IPO Snapshot
Key metrics and details at a glance.
Price Band
₹263
Per ShareLot Size
57 Shares
Minimum Investment
₹14,991
Issue Size
₹777 Cr
Face Value
₹10
Per ShareIPO Type
Book Building
Retail Quota
35%
QIB Quota
50%
NII Quota
15%
IPO Timeline
Important dates for your applying strategy.
Subscription Status
Live demand across investor categories.
Track real-time subscription levels:
*Real-time data subject to exchange updates
Northern Arc Capital Ltd
Business model, operations, and market positioning.
Issue Type
Book Building
ISIN
INE850M01015
About the Company
Northern ARC Capital Limited is a diversified financial services platform set up primarily with the mission of catering to the diverse retail credit requirements of the under-served households and businesses in India. Over the last 15 years, its approach has been to create a differentiated and comprehensive play on the retail credit ecosystem in India spread across sectors. Since 2009, the company has facilitated financing of over Rs. 1.73 trillion that has impacted over 101.82 million lives across India, as of March 31, 2024. The Company has one of the lowest industry-wide credit costs amongst diversified NBFCs in India, as of March 31, 2024.
Industry Overview
The Indian retail credit market is expected to further grow at a CAGR of 17-18% between Fiscals 2024 and 2026 to reach Rs. 100.9 trillion by Fiscal 2026. NBFCs loan outstanding for MSME, MFI, consumer finance, vehicle, affordable housing and agriculture loans are expected to grow at a CAGR of 13-15%, 23-25%, 17-20%, 12-14%, 14-16% and 9-10%, respectively, between Fiscals 2024-2026. Rural areas, which accounted for 47% of GDP, received only 9% of the overall banking credit, as of March 31, 2024, which also shows the vast market opportunity for banks and NBFCs to lend in these areas.
Company History
Northern Arc Capital Limited was incorporated on March 9, 1989 at Madras, India as `Highland Leasing & Finance Private Limited', a private limited company under the Companies Act, 1956 and was granted a certificate of incorporation by the Registrar of Companies, Tamil Nadu at Chennai ("RoC"). The name of the Company was changed to `IFMR Capital Finance Private Limited' and a fresh certificate of incorporation dated June 19, 2009 was issued by the RoC. The Company was then converted into a public limited company under the Companies Act, 2013, and consequently, the name of the Company was changed to `IFMR Capital Finance Limited' and a fresh certificate of incorporation dated December 12, 2017 was issued by the RoC. Subsequently, the name of the Company was changed to `Northern Arc Capital Limited' and a fresh certificate of incorporation dated February 20, 2018 was issued by the RoC. The Company is registered with the Reserve Bank of India (the "RBI") as a non-banking financial company ("NBFC") not accepting public deposits (certificate of registration No. B-07.00430).
Products & Services
- The Company is a diversified financial services platform set up primarily with the mission of catering to the diverse retail credit requirements.
Growth Strategy
- Enhance its ecosystem by growing and deepening relationships with its partners, while leveraging and scaling up its technology products.
- Expand to adjacent sectors such as climate lending and gold loans, and enhance our ESG risk management systems.
- Expand its Fund Management channel.
- Continue to scale its Direct to Customer Lending channel to enhance risk adjusted returns.
- Focus on credit quality to manage credit cost efficiently.
- Continue to diversify its source of funds and widen its lender base to scale its borrowing requirements while lowering costs.
- Expansion through inorganic growth.
Customer Base
The under-served households and businesses in India.
Financial Performance
Revenue, profit after tax and total assets across the last 3 reported financial years.
Revenue
Amount in ₹ crore
Profit After Tax (PAT)
Amount in ₹ crore
Total Assets
Amount in ₹ crore
Figures in ₹ crore, on a consolidated basis, as reported for FY24 to FY26.
Objects of the Issue
How the company plans to utilize IPO proceeds.
Use of Proceeds
The funds raised through this IPO will be used for:
Initial public offering of 29,597,646 equity shares of face value of Rs. 10 each ("Equity Shares") of Northern ARC Capital Limited (The "Company" or the "Company" or the "Issuer") for cash at a price of Rs. 263 per equity share (including a premium of Rs. 253 per equity share) (the "Offer Price") aggregating up to Rs. 777.00 crores (the "Offer") comprising a fresh issue of 19,065,326 equity shares of face value Rs. 10 each aggregating to Rs. 500.00 crores by the company (the "Fresh Issue") and an offer for sale of 10,532,320 equity shares of face value Rs. 10 each aggregating Rs. 277.00 crores comprising 3,844,449 equity shares of face value Rs. 10 each aggregating up to Rs.101.11 crores by Leapfrog Financial Inclusion India (II) Ltd, 1,263,965 equity shares of face value Rs. 10 each aggregating to Rs. 33.242 crores by Accion Africa-Asia Investment Company, 1,746,950 equity shares of face value Rs. 10 each aggregating up to Rs. 45.94 crores by Eight Roads Investments Mauritius II Limited (formerly known as Fil Capital Investments (Mauritius) II Limited), 1,344,828 equity shares of face value Rs. 10 each aggregating up to Rs. 35.369 crores by Dvara Trust (represented by its corporate trustee, Dvara Holdings (formerly known as Dvara Holdings Private Limited and as Dvara Trusteeship Services Private Limited)), up to 1,408,918 equity shares of face value Rs. 10 each aggregating up to Rs. 37.055 crores by 360 One Special Opportunities Fund (formerly known as IIFL Special Opportunities Fund) and up to 923,210 equity shares of face value Rs. 10 each aggregating up to Rs.24.28 crores by Sumitomo Mitsui Banking Corporation, (collectively referred to as the "Selling Shareholders", and each individually, as a "Selling Shareholder" and such offer for sale of equity shares by the selling shareholders, the "Offer for Sale"). The offer includes a reservation of up to 590,874 equity shares of face value Rs. 10 each, aggregating up to Rs. 14.122 crores, for subscription by eligible employees constituting 0.37% of its post-offer paid-up equity share capital (the "Employee Reservation Portion"). The company, In consultation with the Brlms, offered a discount of Rs.24 per equity share to eligible employee(s) bidding in the employee reservation portion ("Employee Discount"). The offer Less the employee reservation portion is hereinafter referred to as the "Net offer". The offer and the net offer constitute 18.34% and 17.97%, respectively, of the fully diluted post-offer paid-up equity share capital of the company. The offer price is Rs.263 per equity share and the offer price is 26.30 times the face value of the equity shares. Bid cane be made for a minimum of 57 equity shares and in multiples of 57 equity shares thereafter. A discount of Rs. 24 per equity share is being offered to eligible employees bidding in the employee reservation portion.
*Subject to approvals and market conditions.
Strengths & Risks
Key competitive advantages and factors to consider before investing.
- Large addressable and underpenetrated market with strong sectoral expertise.
- Large ecosystem of partners and data and technology platform creating strong network effects.
- Proprietary technology product suite transforming the debt market ecosystem.
- Robust risk management based on domain expertise, proprietary risk models and data repository driving asset quality.
- Diversified sources of funding for its own deployment and proactive liquidity management.
- The company operates a diversified business model that exposes it to various risks and an inability to manage such risks may have an adverse effect on its business, results of operations, cash flows and financial condition.
- If the company borrowers default in their repayment obligations it may lead to increased levels of non-performing assets ("NPA"), related provisions and write-offs, its business, results of operations, cash flows and financial condition may be adversely affected.
- The company does not have any identifiable promoter in terms of the SEBI ICDR Regulations and the Companies Act, 2013.
- Its Statutory Auditors have included modifications in their report on the company audited consolidated financial statements for Fiscals 2024 and 2023 under eport on Other Legal and Regulatory Requirements', and certain other remarks/ comments in the annexure to report prescribed under the Companies (Auditor's Report) Order, 2020 for Fiscals 2024 and 2023.
- A significant portion of its investments are in credit facilities and debt instruments that are unsecured, and/or subordinated to other creditors. An inability to recover such investments may result in increased levels of NPAs, which could adversely affect its business, prospects, results of operations, cash flows and financial condition.