Northern Arc Capital Ltd., a non-bank financial institution, will begin its first public offering (IPO) on September 16, which will involve a new issuance of equity shares valued at Rs 500 crore. September 19 is the deadline for this issue, which has established a price range of Rs 249–Rs 263.
The bidding for anchor investors is scheduled for September 13, as per the Red Herring Prospectus (RHP).
IPO structure and OFS sellers
The IPO consists of an offer for sale (OFS) component of up to 1.05 crore shares by current shareholders and a new issuance of equity shares valued at Rs 500 crore.
Leapfrog Financial Inclusion India (II) Ltd, Accion Africa-Asia Investment Company, Sumitomo Mitsui Banking Corporation, Dvara Trust, Eight Roads Investments Mauritius II Ltd, Sumitomo Mitsui Banking Corporation, and 360 ONE Special Opportunities Fund (formerly IIFL Special Opportunities Fund) will offload their stakes under the OFS.
Price band and lot size
For the initial share sale, the company has set a price range of Rs 249–Rs 263. Bids can be placed for a minimum of one lot, which consists of 57 shares, and then in multiples of that lot.
15 per cent of the net offer is designated for non-institutional investors, 35 per cent for retail investors, and half for qualified institutional buyers (QIBs).
Utilisation of IPO proceeds
The company will use the proceeds of the new issue to cover its future capital needs for further lending.
Previous attempt at IPO
Prior to launching its first public offering, Northern Arc Capital submitted draft IPO documents to market regulator SEBI in July 2021. In September of the same year, the regulator gave it permission to go public. The launch, though, was called off.
Business model of the company
A non-deposit-taking non-banking finance company (NBFC), Northern Arc Capital has a diversified business model spanning offerings, products, sectors, geographies, and borrower segments.
Through Originator Partners, it offers direct and indirect credit to underserved households and businesses.
