Northern Arc Capital submits fresh IPO paperwork, raising the total amount to Rs 500 crore

Northern Arc Capital submits fresh IPO paperwork, raising the total amount to Rs 500 crore

Northern Arc Capital submits fresh IPO paperwork, raising the total amount to Rs 500 crore

IPO for Northern Arc Capital In the IPO, new shares worth Rs 500 crore will be issued, and numerous investors will offer to sell 2.1 crore equity shares.

Northern Arc Capital, a financial services business located in Chennai, has once again submitted preliminary documents to SEBI in order to raise money via a public offering.

In the IPO, new shares valued at Rs 500 crore will be issued, and numerous investors will offer 2.1 crore equity shares for sale (OFS).

The selling stockholders in the OFS will include Sumitomo Mitsui Banking Corporation, LeapFrog Financial Inclusion India, Axion Africa-Asia Management Company, Augusta Investments II, At Rhodes Investments Mauritius, Dwara Trust, as well as 360 One Special Opportunities Fund.

The professionally run non-banking financial firm may also think of raising up to Rs 100 crore in capital prior to submitting the red herring prospectus—a pre-IPO placement—to the ROC.

Prior to this, it had submitted IPO paperwork in July 2021 and was granted clearance by the capital markets regulator in September 2021; but, it was unable to reach Dalal Street within the one-year timeframe after receiving SEBI approval. According to media sources, the whole IPO size was about Rs 1,800 crore, including an OFS of 3.65 crore equity shares and a new issuance of shares valued at Rs 300 crore.

One of the possible reasons for not releasing the issue within the allotted term is weakness in the banking and financial services industry, as well as the equities markets, since the beginning of October 2021.

The proceeds from the new offer will be used by the diversified NBFC to finance further lending to meet its future capital needs.

The company must have Tier I and Tier II capital with a regulatory minimum capital to risk-weighted assets ratio (CRAR) of 15% in accordance with the capital adequacy criteria published by the RBI. Moreover, it is essential to guarantee that the aggregate Tier-II capital never surpasses 100% of the Tier-I capital at any one moment.

CRAR was 19.92 percent at the end of September 2023 and 20.77 percent at the end of March 2023.

With total assets according to management (AUM) of Rs 10,081.1 crore for the six-month period ending in September of FY24, Northern Arc Capital reported total disbursements of Rs 6,550 crore in the consumer finance, microfinance, and MSME financing sectors during the same time. gives parts the majority.

For the fiscal year that ended in March of this year, the company declared a net profit of Rs 242.2 crore, up 33% from the same time the previous year. During the same period, net interest income increased by 60% to Rs 591 crore. Previously.

With net interest income of Rs 419.2 crore and total operating revenue of Rs 838 crore, the profit for the six months ending in September of FY24 was Rs 150 crore.

Regarding asset quality, gross non-performing assets (NPAs) climbed from 0.5% in FY22 to 0.77 percent in FY23, while net NPAs were at 0.16 percent in H1FY24 and gross NPAs were at 0.42 percent. During the same time period, net NPA also grew, rising from 0.21 percent to 0.4 percent.

The issue's merchant bankers are Citigroup Global Markets India, Axis Capital, as well as ICICI Securities.