Northern Arc Capital IPO Listing Details

Northern Arc Capital, a diversified financial services platform, made a strong debut on the Indian stock market on Tuesday, 24th September 2024, with its shares listing at a significant premium to the issue price. The company's initial public offering (IPO) had generated robust demand from investors during its subscription period, setting the stage for an impressive market debut.

Listing Details

• Listing Price: Northern Arc Capital shares were listed at ₹330 per share on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), marking a strong start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a substantial premium over the IPO issue price. Northern Arc Capital had set its IPO price band from ₹249 to ₹263 per share, with the final issue price being fixed at the upper end of ₹263.
• Percentage Change: The listing price of ₹330 on both exchanges translates to a premium of 25.48% over the issue price of ₹263.

First-Day Trading Performance

• Opening Price: The stock opened at ₹330 per share.
• Market Capitalisation: As of the listing price, the company's market capitalisation stood at ₹5,325.52 crore.

Market Sentiment and Analysis

• Market Reaction: The market reacted positively to Northern Arc Capital's listing. The strong listing premium indicates robust demand and investor confidence in the company's prospects.
• Subscription Rate: The IPO was massively oversubscribed by 110.91 times, with QIBs leading at 240.79 times subscription.
• Grey Market Premium: Prior to listing, shares were trading at a premium of ₹149 in the grey market, suggesting an expected listing gain of 57% that was partially realized at listing.

Growth Drivers and Challenges

Expected drivers of future performance:

• Diversified financial services platform catering to various sectors
• Strong growth in assets under management (AUM) and profit
• Focus on MSME, consumer finance, and other key lending segments

Potential challenges:

• Competition in the NBFC sector
• Regulatory changes affecting the financial services industry
• Economic fluctuations impacting lending and borrowing activities

Utilisation of IPO Proceeds

Northern Arc Capital plans to use the funds from the fresh issue for:

• Meeting future capital requirements towards onward lending

Financial Performance

The company has demonstrated strong financial growth:

• Revenue increased from ₹909 crore in FY22 to ₹1,890 crore in FY24
• Net Profit rose from ₹181 crore in FY22 to ₹317 crore in FY24
• CAGR growth of 18% in AUM and 20% in profit between FY22 and FY24

As Northern Arc Capital begins its journey as a listed entity, market participants will closely monitor its ability to leverage its position in the diversified financial services sector to drive future growth and shareholder value. The strong listing and overwhelming subscription rates suggest positive market sentiment towards the company's prospects in the dynamic NBFC landscape.