Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Review –
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) is set to open from 16th Sept 2024 to 19th Sept 2024. In this article we will analyze the financials , strengths and weaknesses of the Northern Arc Capital Limited IPO (Northern Arc Capital IPO). Keep scrolling below to read more!
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Overview –
Established in 2009 Northern Arc Capital Limited offers retail loans to underserved households and businesses in India.
Northern Arc Capital’s business model is diversified across different offerings, sectors, products, geographies, and borrower categories. As of March 31, 2024, the company has facilitated over Rs. 1.73 trillion worth of financing, reaching out to over 101.82 million people across India.
The company has expertise in lending across various focus sectors in India, especially in micro, small, and medium enterprise (MSME) finance, microfinance (MFI), consumer finance, vehicle finance, affordable housing finance, and agriculture finance. The company has been active in MSME finance for over 14 years, MFI finance for 15 years and consumer finance for nine years.
The company serves the retail lending market through a multi-channel approach that includes:
- Lending: Extending financing from the company’s balance sheet (Lending) to originator partners in the form of loans or investments in their debt to enable on-lending to retail customers (Intermediate Retail Lending) and directly to underserved households and businesses (Direct-to-Customer Lending) either in collaboration with retail lending partners or through the branch network to offer rural finance and MSME loans, with AUM of Rs. 117,100.19 million across 671 districts, 28 states and seven union territories in India, as of March 31, 2024;
- Placements: Enabling loans to originator partners through various financing products (placements) with a total AUM of Rs. 1,019,038.92 million as of March 31, 2024; and
- Fund Management: Managing debenture funds and providing portfolio management services (fund management) with a total volume of Rs. 120,785.58 million spread across 10 alternative investment funds (AIFs) and three portfolio management service funds (PMS) as of March 31, 2024.
The company also has an end-to-end integrated technology product suite customized to multiple sectors. This includes an in-house technology stack consisting (i) Nimbus, a curated debt platform that enables end-to-end processing of debt transactions; (ii) nPOS, a co-lending and co-origination technology solution based on application programming interfaces (API); (iii) Nu Score, a customized machine learning based analytical module designed to assist originator partners in the loan underwriting process; and (iv) AltiFi, an alternative retail debt investment platform.
As of March 31, 2024, the company had 2,695 permanent employees.
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Synopsis-
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) is set to be open from 16th Sept 2024 to 19th Sept 2024, offering combination of fresh issue of 1.9 crore shares aggregating to Rs 500 crores and offer for sale of 1.05 crore shares aggregating to Rs 277 crores. This NSE,BSE IPO follows a Book Built Issue IPO with tentative listing date fixed as Monday, September 24th 2024.
The total issue size of this IPO amounts to Rs. 777 Crores. The company has allocated shares 35% to retail investors, 50% to institutional and 15% to non institutional investors.
| Particulars | Details |
| Opening Date | 16th Sept 2024 |
| Closing Date | 19th Sept 2024 |
| Lot Size | 57 Shares |
| Face Value | Rs 10 |
| IPO Size | Rs. 777 Cr |
| Fresh Issue | Rs. 500 Cr |
| IPO Price Range | Rs. 249 – 263 |
| Min. Investment | Rs. 14,991 |
| Offer for Sale (OFS) | Rs. 277 Cr |
| Employee Discount | Rs 24 per share |
| Basis of Allotment | 20th Sept 2024 |
| Refunds | 23th Sept 2024 |
| Listing Date | 24th Sept 2024 |
| DRHP Draft Prospectus: | Click Here |
| RHP Draft Prospectus: | Click Here |
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Market Lot
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) minimum market lot is 57 shares with ₹14,991 application amount. The retail investors can apply up to 13 lots with 741 shares or ₹194,883 amount.
| Application | Lot Size | Shares | Amount |
| Retail Minimum | 1 | 57 | ₹14,991 |
| Retail Maximum | 13 | 741 | ₹194,883 |
| S-HNI Minimum | 14 | 798 | ₹209,874 |
| B-HNI Minimum | 67 | 3,819 | ₹1,004,397 |
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Book Running Lead Managers –
- ICICI Securities Limited
- Axis Bank Limited
- Citigroup Global Markets India Private Limited
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Registrar to the offer –
The registrar for the Northern Arc Capital Limited IPO (Northern Arc Capital IPO) is Kfin Technologies Limited . They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.
The Objective Of The Issue –
The company proposes to utilize the Net Proceeds to meet future capital requirements toward onward lending.
Key Performance Indicator –
The market capitalization of Northern Arc Capital Limited is Rs 4242.86 Cr.
KPI as of March 31, 2024.
| Earning Per Share (EPS): Post IPO | ₹19.69 per Equity Share |
| Price/Earning P/E Ratio: Post IPO | 13.36 |
| Return on Net Worth (RoNW): | 13.32% |
| PAT Margin(%) | N/A |
| Net Asset Value (NAV): | ₹177.06 per Equity Share |
Financial Status –
The company’s revenue grew by 45% and PAT increased by 31% between FYs ended 31 March 2024 and 31 March 2023.
Below is the synopsis of the company’s financial data for the financial year that concluded on 31 March 2024.
The company’s total assets are Rs.11,707.66 crore.
The company’s total revenue is Rs.1,906.03 crore.
The company’s PAT is Rs.317.69 crore.
The company’s net worth is Rs.2,314.35 crore
The EBITDA of the company is Rs.1163.56 crore.
| Particulars(in Rs. Crores) | 31 MAR 24 | 31 MAR 23 | 31 MAR 22 |
|---|---|---|---|
| Revenue From Operations | 1906.03 | 1311.2 | 916.55 |
| PAT | 317.69 | 242.21 | 181.94 |
| Net Worth | 2314.35 | 1955.39 | 1739.04 |
| Total Assets | 1107.66 | 9371.57 | 7974.12 |
| Total Reserves and Surplus | 2123.37 | 1784.22 | 1555.3 |
| Total Borrowings | 9047.76 | 7034.57 | 5982.96 |
Evaluation of P/E Ratio :
The P/E Ratio of Northern Arc Capital Limited is 34.61
Comparative Analysis with Listed Peers :
The average P/E Ratio of the industry is 23.28x.
The P/E ratio of Northern Arc Capital Limited IPO (34.61x), as compared with the industry’s average P/E of 23.28x, has an overvaluation (on a P/E ratio basis only). Hence the price of the Share seems aggressively priced for the investors when considered based on the average P/E ratio of the industry.
Peers of Northern Arc Capital Limited IPO (Northern Arc Capital IPO) –
Northern Arc Capital Limited peer comparison with similar listed entities.
| Company Name | EPS (Basic) | NAV (per share) (Rs) | P/E (x) | RoNW (%) | P/BV Ratio | Financial statements |
|---|---|---|---|---|---|---|
| Northern Arc Capital Limited | 34.61 | 177.06 | 13.32 | Consolidated | ||
| Five-star Business Finance Ltd | 28.64 | 177.68 | 26.76 | 16.09 | 4.29 | Consolidated |
| SBFC Finance Limited | 2.35 | 25.87 | 36.64 | 8.53 | 3.36 | Consolidated |
| Creditaccess Grameen Ltd | 90.88 | 1,809.93 | 13.12 | 5.01 | 0.66 | Consolidated |
| Fusion Micro Finance Ltd | 50.3 | 281.93 | 6.21 | 17.74 | 1.11 | Consolidated |
| Bajaj Finance Limited | 236.89 | 1,239.03 | 30.93 | 18.84 | 5.89 | Consolidated |
| Cholamandalam Investment And Finance Company Ltd | 41.17 | 233.26 | 36.22 | 17.46 | 6.38 | Consolidated |
| Poonawalla Fincorp Limited | 21.89 | 105.44 | 17.81 | 20.6 | 3.67 | Consolidated |
| Mas Financial Services Ltd | 15.31 | 108.71 | 18.55 | 14.08 | 2.63 | Consolidated |
Note: The above comparison of listed peers is as per data by 31 March 2024.
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Strengths –
Sizable, underserved market with excellent sectoral knowledge
A vast network of collaborators, data, and technological platforms that produce powerful network effects
A set of proprietary technologies is revolutionizing the debt market environment.
Sturdy risk management built on in-house risk models, domain knowledge, and a data repository that promotes asset quality
Various finance sources for our own implementation and proactive liquidity control
High governance standards are being driven by a seasoned board, renowned investors, and a professional management team.
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Weakness –
The non-performance of the company borrowers’ repayment obligations could result in a rise in non-performing assets (NPA), associated provisions, and write-offs. This could harm its business’s operations, financial condition, and cash flows.
The investments consist primarily of unsecured credit facilities and debt instruments that are ranked below other creditors. If these investments are not recouped, NPA levels could rise, which could harm the company.
Its business could suffer if it cannot comply with the strict regulatory requirements for its listed non-convertible debentures in the future or if there is a delay in doing so.
Function in a highly competitive sector and its incapacity to successfully compete could harm the company’s business, operations, etc.
In the last FYs, its operating and investing activities resulted in negative cash flows.
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) Status
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) allotment status will be available on Kfin Technologies Limited’s website.
Click on Link Kfin Technologies IPO weblink to get allotment status.
Northern Arc Capital Limited IPO (Northern Arc Capital IPO) GMP Today –
IPO’s last GMP is ₹170, last updated 16th Sept 2024. With the price band of 263.00, IPO’s estimated listing price is ₹433(cap price + today’s GMP). The expected percentage gain/loss per share is 64.64%.
Note : The GMP prices shown here are only news related to the grey market. We do not trade/deal in grey market or subject to rates, nor do we recommend trading in grey market.
Conclusion –
Hope the details presented in this blog will assist you in learning about the financial performance of the company. Before making an investment in the company’s upcoming initial public offering (IPO), thoroughly research the company, its finances, business prospects, and market trends.
Also, investors should consult their financial advisor, conduct further due diligence, analyze industry trends and the competitive landscape, and consider risk factors before making an investment decision.
For all such latest information on upcoming IPOs, keep visiting our website.
