Northern Arc Capital IPO Day 3: Check latest GMP, subscription status, review. Should you apply?

Northern Arc Capital IPO: The initial public offering (IPO) of retail loans provider Northern Arc Capital Ltd has been receiving strong demand from investors. The bidding period of Northern Arc Capital IPO ends on September 19 and so far has been heavily oversubscribed.

Northern Arc Capital IPO GMP today, or grey market premium today, is signaling a strong trend for the shares in the unlisted market.

Let us check Northern Arc Capital IPO subscription status, latest GMP, should you apply and other key details of the mainboard IPO.

Northern Arc Capital IPO Subscription Status

Northern Arc Capital IPO has been subscribed 15.13 times in total so far, as the issue received bids for 32.49 crore shares as against 2.14 crore shares on the offer, according to the NSE data till 1:20 pm.

The IPO has been subscribed 15.50 times in the retail category, 0.22 times in the Qualified Institutional Buyers (QIB) category, and 35.15 times in the Non-Institutional Investors (NII) category.

Northern Arc Capital IPO GMP

Northern Arc Capital shares trading at a hefty premium in the grey market today. Northern Arc Capital IPO GMP today is ₹203 per share, according to stock market analysts. This indicates that Northern Arc Capital shares are trading higher by ₹203, or at a premium of 77% at ₹466 apiece, as against their issue price of ₹263 per share, in the grey market.

Northern Arc Capital IPO Review

Analysts have advised applying Northern Arc Capital IPO for the long term given the company’s strong sectoral focus on MSME, microfinance, consumer finance, and more, coupled with its innovative products such as loan against property and supply chain finance, which highlights its ability to address diverse credit needs.

“By looking at the financials, the company has demonstrated impressive growth in revenue from operations/net profit increased by 43.5%/33.1% in FY 2023 and 44.8%/31.2% in FY 2024. On valuation at the upper price band of ₹263, the issue is asking for a market cap of ₹4,244 crore. Based on FY 2024 earnings and fully diluted post-IPO paid-up capital, the company is asking for a Price to book value (PBV) of 1.83x which seems reasonable compared to its listed peers trading at ~3x - 3.5x,” said Rajan Shinde, Research Analyst, Mehta Equities Ltd.

With a strategic plan to expand geographically, innovate product offerings and deepen its rural finance network, with its substantial track record of financing over ₹1.73 trillion and its ‘credit first’ principle, Shinde believes Northern Arc Capital IPO is well-positioned for continued growth.

“Hence, looking at all attributes, we recommend investors to ‘Subscribe’ to the Northern Arc Capital IPO for a long term perspective,” Shinde said.

Northern Arc Capital IPO Details

Northern Arc Capital IPO opened for subscription on Monday, September 16, and will close on Thursday, September 19. The IPO allotment is expected to be finalized on September 20, and the IPO listing date is September 24. Northern Arc Capital shares will be listed on BSE and NSE.

Northern Arc Capital IPO price band is set at ₹249 to ₹263 per share. At the upper-end of the price band, the company looks to raise ₹777 crore from the book-built issue which is a combination of fresh issue of 1.9 crore equity shares worth ₹500 crore and offer for sale (OFS) of 1.05 crore shares aggregating to ₹277 crore.

The company plans to utilize the net issue proceeds to meet future capital requirements toward onward lending.

ICICI Securities, Axis Bank and Citigroup Global Markets India are the book running lead managers of the Northern Arc Capital IPO, while Kfin Technologies is the IPO registrar.

Read all IPO news here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.