Northern Arc Capital IPO closes today; GMP up 60%; should you subscribe?
Source: Business Standard
Northern Arc Capital closes today: The initial public offering (IPO) of Northern Arc Capital has so far received a favorable response from investors. It has received bids for 43,27,38,471 shares against 2,14,78,290 shares offered, resulting in an oversubscription of 20.15 times. Non-Institutional Investors placed the highest bid for Northern Arc Capital IPO at 50.76 times, followed by Retail Individual Investors (RIIs) at 18.94 times. Meanwhile, the quota reserved for Qualified Institutional Buyers (QIBs) received 0.31 times participation by the end of Wednesday, September 18, as per the NSE data.
Northern Arc Capital IPO, which opened for public subscription on Monday, September 16, 2024, closes today. The public issue of Northern Arc Capital, which comprises a fresh issue of 19,011,407 shares and an offer for sale of 10,532,320 shares, with a face value of Rs 10 apiece, is available at a price band of Rs 249-263, and a lot size of 57 shares. Accordingly, investors can bid for a minimum of 57 shares and in multiples thereof.
Should you subscribe to Northern Arc Capital IPO?
Rajan Shinde, Research Analyst at Mehta Equities, has recommended that investors subscribe to the Northern Arc Capital IPO for a long-term perspective. Shinde believes the IPO gives investors an opportunity to invest in a diversified financial services platform dedicated to addressing the retail credit needs of underserved households and businesses in India. According to Shinde, the company’s strong sectoral focus on MSME, microfinance, consumer finance, and more, coupled with its innovative products such as loans against property and supply chain finance, highlights its ability to address diverse credit needs.
“On valuation, at the upper price band of Rs 263, the issue is asking for a market cap of Rs 4244 crore. Based on FY 2024 earnings and fully diluted post-IPO paid-up capital, the company is asking for a Price to Book Value (PBV) of 1.83x, which seems reasonable compared to its listed peers trading at 3x-3.5x,” said Shinde.
With a strategic plan to expand geographically, innovate product offerings, and deepen its rural finance network, along with its substantial track record of financing over Rs 1.73 trillion and its ‘credit first’ principle, Shinde believes NACL is well-positioned for continued growth.
Kfin Technologies is the registrar for Northern Arc Capital IPO, while ICICI Securities, Axis Bank, and Citigroup Global Markets India are the book-running lead managers of the public issue.
The basis of allotment of Northern Arc Capital IPO shares is expected to be finalized on Friday, September 20, 2024, and subsequently, the company’s shares will get credited into demat accounts on Monday, September 23, 2024.
Northern Arc Capital shares are scheduled to make their debut on the bourses on Tuesday, September 24, 2024, by listing on the BSE, and NSE.
First Published: Sep 19 2024 | 10:01 AM IST
