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 |
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 |
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)
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.
