Northern Arc Capital Plans To File For IPO In 10-15 Days, To Raise Rs 2,000 Crore

This is the company's second attempt at listing as it had filed its draft papers with SEBI in July 2021, but did not go through with the process.

(Source: Pixabay)

Non-banking financial company Northern Arc Capital plans to file for an initial public offering over the next 10–15 days.

The company aims to raise about Rs 2,000 crore, according to people familiar with the matter who spoke on condition of anonymity. The public issue of the Chennai-based company is expected to have a mix of fresh issues and offers for sale.

The NBFC is backed by multiple private equity players, including LeapFrog Enterprises Inc., IIFL Ltd., Accion, Augusta and Eight Roads, among others. The PE investors will be among those selling partial stakes through the OFS.

ICICI Securities Ltd., Axis Capital Ltd. and Citi are the book-running lead managers for the issue.

This makes another case for private equity investors selling partial stake in the companies amid positive stock market sentiment and surge of demand seen in the primary market.

Northern Arc Capital provides loans to MSMEs and also meets the credit requirements of underserved households and businesses by providing access to debt financing. Its assets under management stood at Rs 9,078 crore, up 28% from Rs 7,117 crore in FY22.

Its consolidated net profit increased to Rs 230 crore (Rs 172 crore in FY22) due to improved yields and reduced credit costs, the company said in its annual report. This resulted in an improved return on equity of 12.6% and a return on assets of 2.8% for FY23. It had a debt-equity ratio of 3.76 times in the quarter-ended September.

This is the company's second attempt at listing, as it had filed its draft papers with the Securities and Exchange Board of India in July 2021 but did not go through with the process.

The company aims to raise about Rs 2,000 crore, according to people familiar with the matter who spoke on condition of anonymity. The public issue of the Chennai-based company is expected to have a mix of fresh issues and offers for sale.

The NBFC is backed by multiple private equity players, including LeapFrog Enterprises Inc., IIFL Ltd., Accion, Augusta and Eight Roads, among others. The PE investors will be among those selling partial stakes through the OFS.

ICICI Securities Ltd., Axis Capital Ltd. and Citi are the book-running lead managers for the issue.

This makes another case for private equity investors selling partial stake in the companies amid positive stock market sentiment and surge of demand seen in the primary market.

Northern Arc Capital provides loans to MSMEs and also meets the credit requirements of underserved households and businesses by providing access to debt financing. Its assets under management stood at Rs 9,078 crore, up 28% from Rs 7,117 crore in FY22.

Its consolidated net profit increased to Rs 230 crore (Rs 172 crore in FY22) due to improved yields and reduced credit costs, the company said in its annual report. This resulted in an improved return on equity of 12.6% and a return on assets of 2.8% for FY23. It had a debt-equity ratio of 3.76 times in the quarter-ended September.

This is the company's second attempt at listing, as it had filed its draft papers with the Securities and Exchange Board of India in July 2021 but did not go through with the process.

Also Read: Blackstone-Backed Aadhar Housing To Refile IPO Papers With Reduced Size

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