Northern Arc IPO

Northern Arc Capital, a prominent non-banking financing company, offers a bright viewpoint to finance. They serve as a vital link between high-quality last-mile lending institutions and enterprises and conventional capital markets investors. Northern Arc IPO will hit the market in September 2021.

About Northern Arc Capital

Northern Arc Capital is a financial services platform with the primary goal of meeting the various credit needs of underserved families and companies by offering efficient and dependable loan financing.

They have been active in the financial inclusion area for over a decade, having been certified with the RBI as a systemically significant, non-deposit taking non-banking financing company (“NBFC”).

With a business strategy that is diverse across services, industries, products, regions, and borrower categories, they are a prominent player among India’s varied NBFCs.

Service

Through our Originator Partners, they offer loans to underserved families and companies both directly and indirectly.

They employ a risk management approach that combines exclusive statistical data science focused on more than 22 million different datasets with qualitative field-level insights to help with credit evaluation and surveillance.

They can achieve this at scale because to their patented integrated technology solution named “Nimbus by Northern ArcTM” (“Nimbus”).

In Fiscal 2020, their digital activities garnered them the distinction for “Best Digital NBFC of the Year” at the Economic Times BFSI Excellence Awards and “Excellence in Digital Execution for Process Innovation” at the Mint Awards.

Leading Process

Their diverse platform connects small businesses and individuals with a large network of financial institution collaborators, digital tools (such as financial technology businesses (“Fintechs”), and other organisations that act as corporate correspondents to arise financial exposure (jointly, “Originator Partners”).

While they lend to Originator Associates who are financial companies in character for the goal of on-lending, they also work with some Originator Associates who allow us to lend straightforwardly to retail borrowers (referred to as “Retail Lending Associates”).

Northern Arc IPO

Northern Arc Capital, headquartered in chennai has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of 300 crore Fresh issue & Offer for sale(OFS) of 36,520,585 equity shares on 15 July, 2021.

They planned to collect around 1000 cr via its initial public offering (IPO). There will be fresh issue of 300 & OFS (Offer for sale) of 36,520,585 equity shares from existing Principal Shareholders mentioned in the drhp of the company.

They are now waiting for approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market.

Financials Trends

Basic and Diluted Earnings Per Share (EPS)

Objects of the Issue

• Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
• To meet common corporate objectives.

Basis of The offer

The following are among the qualitative variables that go into determining the Offer Price:

• Large, diverse, and expanding base of Initiator and Investor Partners with established long-term ties and network effects.
• Their unique technology solution, Nimbus, enhances company potential while also increasing efficiency.
• A track record of providing tailored debt solutions.
• Business model that is diverse in terms of industries, offers, products, regions, and borrower categories.
• Domain expertise, qualitative field-level insights, and a data lake underpin a strong risk management system.
• Maintaining a diverse source of finance and aggressive liquidity management for our own deployment.
• High governance norms and competent professional management are emphasized.

Northern Arc IPO Peer Comparison

Northern Arc IPO Details

Northern Arc IPO Dates

Northern Arc Capital IPO opening date is September 2021, and the closing date September 2021. The issue may list in September 2021.

Basis of Allotment

Northern Arc IPO Allotment Status

Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.

Here, you can find the Allotment Status of Northern Arc Capital IPO.

Northern Arc IPO GMP

Northern Arc Capital IPO Grey Market Premium is INR 0.

Northern Arc IPO Review

Northern Arc Capital IPO Review will depend on Price band. Once the price band will be issued we will update the Review for this IPO.

Northern Arc Capital IPO Risk

• The macroeconomic situation in India may have a significant negative impact on their business.
• The COVID-19 pandemic, or any subsequent pandemic, public health catastrophe, or disease epidemic, might have a substantial and negative effect on their business.
• The company requires cash on a regular basis, and any interruption in their financial sources would have a significant negative impact on the operations.
• Their business operations expose them to high-risk borrowers in underserved families on a direct and indirect basis. Defaults on a big scale in this area might have a negative impact on their business.
• The microfinance industry is strongly regulated, and any negative changes in the industry might have an impact on their business.

Other Threats

• Due to significant concentrations of exposures to a single or a few counterparties, industries, products, or states, their asset quality may be severely influenced by correlated risk occurrences.
• Their fund management company may be exposed to a variety of extra risks, which, if realised, might have a negative impact on their financial situation.
• They may not be able to recover the whole amount owing to them through their collections system, exposing them to losses and perhaps affecting their profitability.
• Credit facilities and debt instruments that are unprotected and/or subordinated to other creditors account for a large part of their investments.

Northern Arc IPO Brokerage views

• Yes Securities : Not Updated
• Choice Brokering: Not Updated
• Axis Securities: Not Updated
• IIFL Securities: Not Updated
• Trade swift: Not Updated
• Anand Rathi : Not Updated
• ICICI Securities: Not Updated

Northern Arc IPO Subscription Status

Principal Shareholders

1. LeapFrog
2. Augusta
3. IIFL Funds

Principal Shareholders’s Holding

Northern Arc IPO Prospectus

• Northern Arc Capital  DRHP 

Contact Details

Northern Arc Capital Limited

No. 1, Kanagam Village, 10th Floor, IITM Research Park,
Taramani, Chennai 600 113, Tamil Nadu, India
Tel.: +91 44 6668 7000
E-mail : [email protected]

Website: https://www.northernarc.com/

Northern Arc IPO Registrar

KFin Technologies Private Limited
Selenium Tower-B, Plot 31 & 32, Gachibowli
Financial District, Nanakramguda, Serilingampally
Hyderabad 500 032
Telangana, India
Tel: +91 40 6716 2222
E-mail: [email protected]
Website: www.kfintech.com

Lead Manager(s)

1. Axis Capital Limited
2. Credit Suisse Securities (India) Private Limited
3. IIFL Securities Limited
4. SBI Capital Markets Limited

We hope we are able to answer all your questions about Northern Arc IPO. If you don’t have a Demat account, open it now with Zerodha best trading app.

Clarification

The reference of IPO Grey Market Premium (IPO GMP) is only valid for the date specified in the header.
On the IPO Grey Market, we do not purchase or sell IPO forms.

The Kostak Rate is the profit earned by selling an IPO application (in an off-market transaction) to somebody else before the issue is allotted or listed.

Do not subscribe to an IPO based solely on the premium price, as it may alter at any time before to the listing. Only consider the fundamentals of the companies when subscribing.

The GMP rates for IPOs are based on market intelligence. Please keep in mind that these IPO GMP rates may vary by geography and market.

Note:

We do not engage in grey market trading or facilitate the purchase or sale of IPO forms.

What is Grey Market?

The phrase “grey market” refers to an illegal over-the-counter market where IPO applications and IPO stock are traded before the entity is listed on a stock exchange. This is a technique for dealers to help consumers who wish to sell their home before it goes on the market.

This is also a way to increase the listing fee and provide help for the issue prior to the listing. In the IPO grey market, there are two types of transactions that take place:

• IPO stocks are traded at a premium in the grey market.
• At a kostak, an IPO application is traded.

What is grey Market Premium?

The Grey Market Premium, or GMP, is the price at which IPO stock shares are exchanged in the grey market.

This could be correct or incorrect, implying that the grey market trading price is greater or cheaper than the issue price, depending on demand and supply for the stocks.

Typically, individuals who do not want to incur the risk of their shares not being allocated through an IPO can purchase shares on the grey market in the hopes of flipping them on the IPO for a profit.

What is Kostak?

The additional amount in rupees at which IPO applications are sold in the IPO Grey Market is known as kostak (or price of application). The bonus of a maximum lot retail application in an IPO is generally described as the ‘Kostak’ value.

The Kostak price is significant primarily before the offer is closed for subscription and the ultimate bidding status is made accessible to IPO participants. After the final auction status is known to investors, only a small percentage of IPO applications are exchanged.

‘Kostak’ is made for those who do not want to incur a risk on an IPO or gain from a listing.

Example:

Northern Arc IPO
Issue Price: Rs 306 Per Equity Share (Maximum Bid price)
Lot Size: 45
Grey Market Premium: Rs 220 to Rs 230
Kostak (Rs 13770): Rs 680 to Rs 720

This means Northern Arc IPO applications of Rs 13770 are being traded in IPO Grey Market at Rs 680 to Rs 720.

Despite the fact that this IPO’s Grey Market Premium is roughly 75% of the issue price, the ‘Kostak’ is just 5% of the application value.

Kostak rate

The Kostak rate is the fee received by an investor who sells his or her IPO application on the grey market. Regardless of allotment status, this is the money an individual stands to gain.

Subject to Sauda

The money that an investor stands to gain by selling his or her application for firm allotment is referred to as the subject to Sauda. Firm allocation is the important operative phrase here. The sauda will be cancelled if the applicant is not allotted.

When selling an IPO application in the grey market, the client and seller agree that the sale will only be legal if the seller receives the allocation. The deal is avoided if the seller does not get any stocks throughout the IPO procedure.

FAQ

Northern Arc IPO Opening Date?

Northern Arc IPO will open in September 2021.

Northern Arc IPO Listing Date?

Northern Arc Capital IPO will list in September 2021.

Northern Arc IPO GMP Today?

Northern Arc IPO Grey Market Premium is INR 0.

Northern Arc IPO Allotment Date?

Northern Arc IPO basis of allotment will be in September 2021.

Lot size for Northern Capital IPO?

Lot size for IPO is 0.