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MUMBAI : Northern Arc Capital Ltd has filed a draft red herring prospectus (DRHP) with Securities and Exchange Board of India (Sebi) to raise funds via initial public offering (IPO).

The IPO comprises fresh issue of 300 crore and an offer for sale (OFS) of shares up to 36.52 million by its existing shareholders.

The offer for sale comprises up to 8.99 million shares by Leapfrog Financial Inclusion India, up to 4.08 million shares by Eight Roads Investments Mauritius II, up to 3.86 million shares by Dvara Trust, up to 5.04 million shares by IIFL Special Opportunities Fund, up to 1.23 million shares by IIFL Special Opportunities Fund Series 2, up to 0.54 million shares by IIFL Special Opportunities Fund Series 3, up to 1.86 million shares by IIFL Special Opportunities Fund Series 4 and up to 1.52 million shares by IIFL Special Opportunities Fund Series 5, up to 2,310,191 equity shares by Accion Africa-Asia Investment

The lender said it will consider issuing shares on a private placement for up to 150 crore prior to filing of the red herring prospectus with registrar of companies.

The proceeds from the issue will be used towards augmenting its base capital. As on March 2021, its capital to risks weighted asset ratio was 28.89% of which tier-I capital was 27.62%.

For FY21, its total revenue from operations was at 681.17 crore against 632.82 crore last year. Net profit for the period stood at 76.59 crore versus 102.93 crore a year ago. Its gross NPA stood at 2.3% while net NPA was at 0.9%.

Its total outstanding borrowings were at 3,920.81 crore, of which its contractual maturities within one year were 1,887.88 crore.

Axis Capital, Credit Suisse, IIFL Securities and SBI Capital Markets are the lead managers to the issue.

Northern Arc Capital is a leading player among India’s diversified NBFCs, with a business model diversified across offerings, sectors, products, geographies and borrower segments. It provides access to credit to underserved households and businesses directly and indirectly through its originator partners.

As of March 2021, the lender had an asset under management (including its investment in AIFs) of 5,221 crore while it had credit exposure, directly or indirectly, spread across 657 districts in 28 states and seven Union territories.

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