Northern Arc Capital IPO bought 20.18 times on third day of bidding

Northern Arc Capital IPO

Non-banking finance company Northern Arc Capital's Rs 777-crore initial public offering was subscribed 20.18 times on the third day of bidding of September 18, as investors bought 43.33 crore equity shares against the offer size of 2.14 crore shares.

The lender is raising Rs 500 crore via fresh issue component of IPO, and further Rs 277 crore through offer-for-sale at the upper end of price band of Rs 249-263 per share.

Non-institutional investors were at the forefront, buying 50.8 times the reserved portion. Retail investors were at the second position, picking 18.97 times the allotted quota, while the response from qualified institutional buyers was lukewarm as they bid 0.31 times the portion set aside for them.

The company has also reserved 5.9 lakh shares for its employees who have bought 4.32 times the said reserved portion. They will get these shares at a discount of Rs 24 per share to the final issue price.

Northern Arc, which provides loans to under-served households and businesses in the MSME, MFI, consumer and vehicle finance sectors, has already mobilised Rs 228.86 crore via anchor book on September 13. Several institutional investors including Quant Mutual Fund, Abakkus Diversified Alpha Fund, Kotak Mahindra Life Insurance, Goldman Sachs, Anchorage Capital Fund, Volrado Venture Partners Fund, and SBI Life Insurance Company, participated in the anchor book.

The LeapFrog Financial, and Augusta Investments-backed company intends to utilise its fresh issue proceeds for its future capital requirements towards onward lending.

The offer-for-sale money will go to selling shareholders - LeapFrog Financial Inclusion India (II), Accion Africa-Asia Investment Company, 360 ONE Special Opportunities Fund, Eight Roads Investments Mauritius II, Dvara Trust, and Sumitomo Mitsui Banking Corporation.