Northern Arc Capital Debuts With 33% Premium On Bourses
During its subscription phase, the issue closes with a total subscription of 117.19 times
The initial public offering (IPO) of Northern Arc Capital debuted at 33 per cent premium at Rs 351 per equity share on the National Stock Exchange (NSE) against its issue price of Rs 263.
The Rs 777 crore IPO consisted of fresh issues worth Rs 500 crore and offer-for-sale (OFS) worth Rs 277 crore with the price band fixed at Rs 249 to 263 per equity share.
During its subscription phase, the issue closed with a total subscription of 117.19 times. Retail category closed with 32 times subscription, while qualified institutions showed a massive interest as subscription surged to 242.73 times.
ICICI Securities, Axis Bank and Citigroup Global Markets were the book running lead managers, while Kfin Technologies was the registrar to the offer.
Expert Note
“The company has a diversified base of lenders (including various banks, offshore financial institutions and NBFCs), and investors provide a strong base for increased funding. The company's differentiated credit underwriting processes and risk models have helped deliver strong asset quality. Given these issues, investors who have been allotted shares are advised to book profits and exit their positions for the time being,” said Prathamesh P Masdekar, Research Analyst, StoxBox.
IPO Objectives
The net proceeds of Rs 500 crore from the fresh issue will be utilised towards funding capital expenditure requirements for purchase of equipment and general corporate purposes.
Moreover, the firm will also get benefits on listing in the public market which will enhance the brand’s visibility and provide liquidity to the shareholders.
Firm’s Financials
Arkade Developers registered the revenue of Rs 1,906 crore in FY 23-24 against Rs 1,311 crore in FY 22-23.
While, the profit after tax (PAT) increased to Rs 317 crore in FY 24 against Rs 242 crore in FY 23.
Overall, the revenue increased by 45 per cent, whereas PAT climbed 31 per cent between FY 23 and FY 24.
According to the Crisil Report, the company has one of the lowest gross non-performing assets (GNPA) of 0.45 per cent and net non-performing assets (NNPA) of 0.08 per cent as of FY24.
