Northern Arc Capital IPO 2024: A Comprehensive Overview
Northern Arc Capital, a leading financial services company, is all set for its IPO in September 2024. This public offering is a significant opportunity for investors, with the company aiming to raise up to ₹777 crore through a mix of fresh issues and an offer for sale (OFS). Here is a detailed overview of the key aspects of the IPO.
IPO Details:
- Issue Price: ₹249 to ₹263 per share
- Issue Size: Up to ₹777 crore, with ₹500 crore from fresh issues and ₹277 crore through OFS.
- Market Lot: 57 shares
- Listing on: BSE, NSE
- Open Date: September 16, 2024
- Close Date: September 19, 2024
- Listing Date: September 24, 2024
Company Overview:
Northern Arc Capital is a leading company in India’s financial services sector, providing lending and financial solutions across various sectors. The company has shown consistent financial growth with revenue growth of 45% from FY23 to FY24, reaching ₹1,906 crore, and profit after tax (PAT) of ₹317.69 crore, showing a growth of 31%.
The company’s business model focuses on lending to underserved sectors such as micro, small and medium enterprises (MSMEs), non-banking financial companies (NBFCs) and affordable housing, making it a key entity in India’s financial inclusion efforts. With assets worth ₹11,707 crore as of March 31, 2024, Northern Arc has established itself as a stable and growing company.
Financials:
- Revenue Growth: 45% increase in FY24 (₹1,906 crore)
- PAT Growth: 31% increase (₹317.69 crore in FY24)
- Assets: ₹11,707.66 crore
- Net Worth: ₹2,314.35 crore
- P/E Ratio: 11.78
Investment Thoughts:
Northern Arc Capital’s IPO offers an attractive opportunity due to the company’s strong financial performance, growing market presence, and focus on expanding financial inclusion. With a lower P/E ratio than other IPOs, this stock could offer good value for long-term investors.
However, investors should also consider risks such as exposure to weak sectors such as MSMEs, which may be sensitive to economic cycles. Additionally, with a debt/equity ratio of 3.9, the company relies heavily on borrowings, which could impact profitability during adverse conditions.
In conclusion, Northern Arc Capital’s IPO is a promising option, especially for investors looking to enter India’s growing financial services market. However, it is essential to weigh the company’s strong financial performance as well as potential risks before making an investment decision.
Northern Arc Capital IPO 2024: Frequently Asked Questions (FAQ)
- What is the issue price of the Northern Arc Capital IPO?
- The issue price ranges between ₹249 to ₹263 per share.
- What is the total size of the Northern Arc Capital IPO?
- The total issue size is ₹777 crore, which includes ₹500 crore from fresh issues and ₹277 crore through an Offer for Sale (OFS).
- What are the opening and closing dates for the IPO?
- The IPO opens on September 16, 2024 and closes on September 19, 2024.
- What is the minimum lot size for investment?
- The market lot size is 57 shares, meaning the minimum investment amount depends on the final issue price.
- On which stock exchanges will Northern Arc Capital be listed?
- The shares will be listed on both BSE and NSE.
- When will the shares be listed?
- The expected listing date is September 24, 2024.
- What are the company’s financial highlights?
- Northern Arc Capital reported a revenue of ₹1,906 crore in FY24, a 45% increase from the previous year. Its Profit After Tax (PAT) was ₹317.69 crore, reflecting a 31% growth.
- What sectors does Northern Arc Capital focus on?
- The company focuses on providing financial solutions to underserved sectors, including MSMEs, NBFCs, and affordable housing.
- What are the risks involved in investing in Northern Arc Capital IPO?
- Risks include high exposure to vulnerable sectors like MSMEs and a relatively high debt/equity ratio of 3.9, which may impact profitability during economic downturns.
- Who are the lead managers for this IPO?
- ICICI Securities Limited, Axis Bank Limited, and Citigroup Global Markets India Private Limited are the lead managers
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