Northern Arc Capital Limited

About Northern Arc Capital Limited

Incorporated in 1989, Northern Arc Capital Limited is a diversified financial services platform and one of India’s leading players among diversified NBFCs (Non-Banking Finance Companies) in terms of Assets under Management (AUM) as of 31 March 2024.

It offers financing for micro, small, and medium enterprises (MSMEs), microfinance (MFI), consumer finance, vehicle finance, affordable housing finance, and agricultural finance. As of FY24, it was present in 671 districts, 28 states, and seven union territories in India. 

It operates on a phygital model (physical + digital) and has a network of 316 physical branches across India and 50 select originator partners who enable it to lend to its borrowers as of 31 March 2024. 

It has a diverse lender base, including banks, offshore financial institutions, NBFCs, development financial institutions (DFIs), and high-net-worth individuals (HNIs). As of FY24, it had one of the lowest gross non-performing assets (GNPA) of 0.45% and net non-performing assets (NNPA) of 0.08%. 

Between FY22 and FY24, it saw a CAGR rise of 18% in its AUM and 20% in its profit. Moreover, the Indian retail credit market is expected to grow at a CAGR of 17-18% between FY24 and FY26 to reach ₹100.9 trillion, which could benefit the company. 

And now, Northern Arc Capital Limited is coming out with its initial public offer (IPO). The total IPO issue size is ₹777 crore, comprising fresh issue, aggregating to ₹500 crore, as well as an offer for sale, aggregating to ₹277 crore. The money raised from the fresh issue will be utilised for future lending requirements. Its shares will be listed on the NSE and BSE.

Here are key details about the Northern Arc Capital IPO:

Financial snapshot

Here’s a quick look at Northern Arc Capital Limited IPO’s strengths, weakness, opportunities and risks (SWOT analysis)

Strengths and opportunities

1. Strong sectoral expertise and large underpenetrated market as rural areas receive only 9% of the overall banking credit as of 31 March 2024. 
2. Large ecosystem of partners, including 328 originator partners, 50 retail lending partners and 1,158 investor partners as of FY24.
3. The proprietary technology product suite comprises Nimbus, nPOS, AltiF, and Nu Score, which earned the ‘Best Digital NBFC of the Year’ award in 2020. 
4. Diversified sources of funding included 12 rounds of equity fund raises in the last 11 fiscals. 
5. Strong ESG framework integrated into the business model as more than 43% of the total underlying borrowers of its originator partners comprised women as of 31 December 2023. 

Risks and threats

1. A significant portion of its investments are in credit facilities and unsecured debt instruments, making up 42% of the total AUM in FY24.
2. Has a total outstanding borrowing of ₹9,047 crore as of FY24, which subjects it to certain conditions and restrictions in terms of its financing arrangements as it has not been in compliance with certain of these covenants in the past.
3. Operates in a highly competitive industry, and competition from other banks, NBFCs, MFIs, informal money lenders, and commercial banks operating in the same space has significantly increased.
4. Has experienced negative cash flows from operating activities consistently in FY22, FY23 and FY24.
5. Business operations involve direct and indirect exposures to relatively high-credit-risk borrowers in India's underserved households and businesses. 
6. Financial performance is vulnerable to interest rate risk.

Northern Arc Capital Limited IPO details

| Northern Arc Capital Limited IPO date

According to the offer document filed by the company with the SEBI, the Northern Arc Capital IPO’s opening date – in other words, the Northern Arc Capital IPO launch date – will be 16th September 2024. The Northern Arc Capital IPO closing date is 19th September 2024. After this, investors will be updated about the allotment status on 20th September 2024.

Investors who have been allotted shares can expect them to be credited to their demat account on 23rd September 2024. The Northern Arc Capital IPO listing date is 24th September 2024. The listing date is the date on which a company's shares are listed on the bourses—NSE and BSE. 

| Northern Arc Capital Limited IPO Price Band

The IPO is a fresh issue and an offer for sale. The Northern Arc Capital IPO price band has been set between ₹249 and ₹263 per share. Interested investors can choose a price within this band to apply for the IPO. 

The Northern Arc Capital IPO listing price will be determined on 24th September 2024. The listing price is the price at which a company’s shares debut on the stock exchanges.

| Northern Arc Capital Limited IPO Lot size

The Northern Arc Capital IPO details have been declared. The Northern Arc Capital IPO lot size is set at 57 shares, and an investor can apply for a minimum of 1 lot. Meanwhile, the Northern Arc Capital IPO issue size is approx ₹777 crore. 

How to pre-apply for the Northern Arc Capital Limited IPO?

You can pre-apply for the Northern Arc Capital Limited IPO on Upstox. The pre-application for this IPO, which means pre-apply open date, usually begins a day before the IPO opens for subscription. 

Follow these steps to pre-apply for the IPO: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Northern Arc Capital Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Pre-Apply’
7. Accept the mandate on your UPI app

How to apply for the Northern Arc Capital Limited IPO?

If you are interested in this investment opportunity but unsure how to apply for the Northern Arc Capital Limited IPO, here we are listing out the steps for you. 

When the public issue opens for subscription, one can follow this step-by-step guide on how to apply for the Northern Arc Capital Limited IPO on Upstox: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Northern Arc Capital Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

How to check the Northern Arc Capital Limited IPO allotment status?

When the allotment process is completed, you can check the status of your application on the Upstox app. Share allotment is generally done around five to six days after an IPO closes. 

Here’s a step-by-step guide on how to check the Northern Arc Capital Limited IPO allotment status:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover page, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, you will find the ‘View all’ option
5. Once you click on ‘View all’, you will be directed to the ‘IPO’ tab
6. In the ‘IPO’ tab, click on ‘My applications’ 
7. In ‘My applications’, under the History section, your Northern Arc Capital Limited IPO allotment status will be mentioned

Check Allotment Status

Open a demat account with Upstox to apply for the Northern Arc Capital Limited IPO

To apply for the Northern Arc Capital Limited IPO, you need to mandatorily have a demat account. A demat account helps you hold the shares you buy in a dematerialised format. If you don’t have a demat account yet, you can open one with Upstox by visiting our website or by downloading the app.

Here is a step-by-step guide on how to open a demat account with Upstox:

1. Click here to visit the demat account opening page on the Upstox website. 
2. Enter your phone number and other essential details to begin opening a demat account.
3. Upload the scanned copies of your PAN, Aadhaar card, a cancelled cheque, and your bank statement as needed. 
4. Complete the e-verification using the OTP sent to your registered mobile number. 

This is all it takes to open a demat account with Upstox. Easy and quick, right? 

Open Demat Account

Upstox – trading app to apply for the Northern Arc Capital Limited IPO

Applying for IPOs with Upstox is extremely easy. The user-friendly interface and top-notch security make Upstox one of the leading trading apps in India.

You can apply for the Northern Arc Capital Limited IPO on Upstox, provided you have a demat account. As mentioned in the previous section, you can simply follow the steps to open a demat account with Upstox. The biggest advantage is that when you apply for an IPO using your Upstox account, the brokerage charges are zero.

In fact, courtesy of its robust features and minimal charges, Upstox is among the most preferred trading apps. Lakhs of Indians trust Upstox as it is a reliable trading platform that makes IPO applications easy.