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Home»IPO Analysis»Northern Arc Capital Limited | IPO Analysis
IPO Analysis

Northern Arc Capital Limited | IPO Analysis

Vicky NagarBy Vicky Nagar16 September 2024Updated:16 September 2024No Comments3 Mins Read
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Company Overview:

Northern Arc Capital Limited, founded in 2009, is a leading entity in India's retail lending sector. The company specializes in providing financial services to underserved households and businesses. By March 31, 2024, Northern Arc had facilitated loans totaling over ₹1.73 trillion, impacting more than 101.82 million individuals throughout the country.

Diverse Business Model

Northern Arc operates with a multifaceted business model that covers a broad range of sectors, products, geographic regions, and borrower profiles. Its areas of expertise include:

  • MSME Finance: Extensive experience of over 14 years.
  • Microfinance (MFI): Deep knowledge accumulated over 15 years.
  • Consumer Finance: Engaged in this field for the past 9 years.
  • Additional Focus Areas: Includes vehicle finance, affordable housing finance, and agricultural finance.

Technology-Driven Solutions

The company employs a suite of proprietary technology solutions tailored to various sectors, such as:

  • Nimbus: A specialized platform for managing debt transactions.
  • nPOS: An API-based system designed for co-lending and co-origination.
  • Nu Score: An AI-enhanced tool that aids in loan underwriting for originator partners.
  • AltiFi: A platform dedicated to retail debt investment.

Objective of the IPO

The primary aim of the IPO is to secure funds to boost lending capabilities and fulfill future capital needs.

Summary of Financial Information:

Period Ended 31-Mar-24 31-Mar-23 31-Mar-22
Assets 11,707.66 9,371.57 7,974.12
Revenue 1,906.03 1,311.20 916.55
Profit After Tax 317.69 242.21 181.94
Net Worth 2,314.35 1,955.39 1,739.04
Reserves and Surplus 2,123.37 1,784.22 1,555.30
Total Borrowing 9,047.76 7,034.57 5,982.96
Amount in Rs. Crore

Comparison with Listed Peers:

Company Name P/E P/B RoA (%)
Northern Arc Capital Ltd 11 1.4 3
Five-Star Business Finance Ltd 25 4.17 8
SBFC Finance Ltd 34 3.2 4
CreditAccess Grameen Ltd 13 2.91 6
Fusion Micro Finance Ltd 9 1.12 5
Bajaj Finance Ltd 32 5.98 4
Cholamandalam Investment & Finance Co 36 6.53 3
Poonawalla Fincorp Ltd 18 3.72 7
MAS Financial Services Ltd 20 2.21 3
Data in Rs. Crore

Key IPO Details:

  • IPO Dates: 16 to 19 September, 2024
  • Price Band: Rs. 249 to Rs. 263 per share
  • Lot Size: 57 shares
  • Total Issue Size: Rs. 777 Crores (Fresh Issue: Rs. 500 Cr.)
  • Listing Date: 24 Sep, 2024
  • Retail Quota: 35%
  • GMP: 57% (for informational purposes only)
Allotment Link

Note: For additional information & risk factors please refer to the Red Herring Prospectus

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Disclaimer: We are not SEBI registered. All the views are personal and only for educational purposes. Do your due diligence before making any trading or investing decisions. The data provided in this blog post is for illustrative purposes only and does not constitute financial advice. Always consult with a qualified financial advisor before making investment decisions.

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Vicky Nagar
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Vicky Nagar is an equity trader with 5+ years of experience in trading and investing. He has expertise in equity valuation, sectoral analysis, index analysis, and in identifying the market trends. He is a NISM Certified Research Analyst. Formerly a relationship manager at Kotak Mahindra Bank Limited in the Agri-Business Group, he also has teaching experience at KS School of Business Management, Gujarat University, and as an Academic Associate at IRMA (Institute of Rural Management Anand). He holds a BBA (Gold Medalist) and an MBA (Gold Medalist) in Marketing.

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