Northern Arc Capital IPO Anchor Allocation at 30%

Northern Arc Capital IPO saw a positive anchor allocation response, with 30% of the total IPO size subscribed by anchor investors. Out of 29,006,785 shares on offer, anchors picked up 8,702,031 shares, demonstrating strong market confidence. The anchor allocation details were reported to the stock exchanges on 13th September 2024, just ahead of the IPO opening on 16th September 2024.

The book-built issue of ₹777.00 lakhs comprises a fresh issue of 1.9 lakh shares aggregating to ₹500.00 lakhs and an offer for sale of 1.05 lakh shares aggregating to ₹277.00 lakhs. The price band is set at ₹249 to ₹263 per share, with a face value of ₹10 per share. This includes a share premium of ₹253 per share at the upper end of the price band.

The anchor allocation process, which took place on 13th September 2024, saw strong participation from institutional investors. The entire anchor allocation was made at the upper end of the price band, ₹263 per share, indicating robust demand and confidence in the company's prospects.

After the anchor allocation, the overall allocation of the IPO looks as follows:

Notably, the 8,702,031 shares allocated to anchor investors were reduced from the original Qualified Institutional Buyers (QIB) quota. As a result, the QIB quota has been reduced from 50% before the anchor allocation to 20% after the allocation. This adjustment ensures that the overall allocation to QIBs, including the anchor portion, remains within regulatory limits.

The lock-in period for anchor investors is an important aspect of the allocation. For the Northern Arc Capital Limited IPO, the lock-in details are as follows:

• Lock-in Period (50% Shares): 20th October 2024 
• Lock-in Period (Remaining Shares): 19th December 2024

This lock-in period ensures that anchor investors maintain their investments for a specified duration, stabilising the stock price after listing.

Anchor Investors in Northern Arc Capital IPO

Anchor investors are typically large institutional investors allotted shares in an IPO before it opens to the public. The anchor allocation process is a crucial part of the IPO, as it helps in price discovery and builds confidence among retail investors. The strong response from anchor investors often sets a positive tone for the public issue and can influence the overall subscription levels.

On 13th September 2024, Northern Arc Capital IPO completed the bidding for its anchor allocation. There was a robust response as the anchor investors participated in the book-building process. A total of 8,702,031 shares were allotted to 15 anchor investors. The allocation was done at the upper IPO price band of ₹263 per share, resulting in an overall anchor allocation of ₹228.86 crore. The anchors have already absorbed 30.00% of the total issue size of ₹762.88 crore, indicating strong institutional demand.

Out of the total allocation of 8,702,031 Equity Shares to the Anchor Investors, 979,887 Equity Shares (i.e., 11.26% of the total allocation to Anchor Investors) were allocated to 1 domestic mutual fund through 1 scheme.

Key IPO Details:

• IPO Size: ₹762.88 crores
• Shares Allocated to Anchors: 8,702,031
• Anchor Subscription Percentage: 30%
• Listing Date: 24th September 2024
• IPO Opening Date: 16th September 2024

About Northern Arc Capital IPO and How to Apply for Northern Arc Capital IPO

Northern Arc Capital Limited, founded in 2009, offers retail loans to underserved households and businesses in India.

The company's business model is diversified across different offerings, sectors, products, geographies, and borrower categories. As of 31st March 2024, the company has facilitated over ₹1.73 trillion worth of financing, reaching out to over 101.82 million people across India.

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