Shares of Chennai-based Northern Arc Capital Ltd will be listed at the bourses today. The company, formerly known as IFMR Capital, Finance has fixed the IPO price at ₹263, at the upper ed of the price band ₹249-263.
The IPO saw a robust response from all category investors, by subscribing 110.70 times.
Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, said, Northern Arc Capital, a leading non-banking financial company (NBFC) specialising in retail loans, is set for a strong stock market listing. The IPO received an impressive subscription and has a current grey market premium (GMP) of ₹144 (54.75 per cent), indicating high investor interest.
The quota for Qualified Institutional Buyers (QIBs) was subscribed 240.79 times, while non-institutional investors by142 times and retail investors nearly 31 times.
Northern Arc Capital has 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.
Registered with the Reserve Bank of India (RBI) as systemically important, the company is a non-deposit-taking non-banking financial company (NBFC) and has been operating in the financial inclusion space for over a decade.
“The company’s focus on serving underserved households and businesses positions it well in the competitive Indian retail lending market. While Northern Arc Capital has demonstrated growth in revenue and profit, challenges such as negative cash flow and a high debt-to-equity ratio need to be considered,” said Shivani.
ICICI Securities, Axis Capital, and Citigroup Global Markets India are the book-running lead managers to the issue.