Northern Arc Capital Raises $27.4 Million in IPO Ahead of Public Subscription

Northern Arc Capital, a leading non-banking financial company in India, has successfully raised $27.4 million from prominent investors ahead of its upcoming IPO. The company plans to use the fresh proceeds to meet future capital needs for onward lending. The IPO is set to open for subscription on Monday, September 16.

CONTENTS: Northern Arc Capital Raises $27.4 Million in IPO 

• Northern Arc capital raises $27.4 million in IPO.
• Northern Arc IPO attracts big investors.
• Northern Arc uses IPO proceeds for lending.

Non-banking lender Northern Arc Capital has raised INR 229 crore (approximately $27.4 million) from prominent anchor investors ahead of its upcoming initial public offering (IPO), which is set to open for subscription on Monday, September 16. The company allocated 87.02 lakh equity shares to 15 funds at INR 263 per share, the upper end of the IPO price range. This brings the total transaction value to INR 229 crore, according to a report by PTI, based on a circular published on the Bombay Stock Exchange (BSE).

SBI General Insurance, SBI Life Insurance, Reliance General Insurance, Kotak Mahindra Life Insurance, Goldman Sachs (Singapore) Pte, Societe Generale, and Quant Mutual Fund are among the anchor investors in Northern Arc Capital’s IPO.

The Chennai-based NBFC’s INR 777 crore IPO will open for public subscription from September 16 to September 19. The price range for the shares has been set between INR 249 and INR 263 per share, each with a face value of INR 10.

The IPO includes a fresh issue of shares worth INR 500 crore and an offer for sale (OFS) of up to 10,532,320 shares valued at INR 277 crore at the upper price range. This brings the total issue size to INR 777 crore.

The OFS shares will be offered by existing investors, including Leapfrog Financial Inclusion India (II) Ltd, Accion Africa-Asia Investment Company, Eight Roads Investments Mauritius II Ltd, Sumitomo Mitsui Banking Corporation, 360 ONE Special Opportunities Fund (formerly IIFL Special Opportunities Fund), and Dvara Trust.

Northern Arc Capital plans to use the fresh proceeds from its IPO to meet future capital needs for onward lending, according to the report.

Founded by Ashish Mehrotra in 2009, Northern Arc provides credit to MSMEs, Indian households, financial institutions, and emerging businesses, including startups. It has supported companies like Rebel Foods, ProsParity, slice, and BharatPe.

Since its inception, Northern Arc claims to have financed INR 1.5 trillion across India and manages assets under management (AUM) exceeding INR 10,081 crore. In the financial year 2023-24 (FY24), the company’s total revenue reached INR 1,890 crore, marking a 44% rise from INR 1,304 crore in the previous year, with a profit of INR 317.69 crore.

In February, Northern Arc filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI).

Northern Arc Capital Raises $27.4 Million in IPO  This IPO follows over two months after the company raised $75 million (INR 620 crore) through non-convertible debentures (NCDs) from Dutch development bank FMO. Additionally, in April, Northern Arc secured $80 million (INR 667 crore) from the International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group, through an equal mix of equity and debt funding.