IPOs occupy a significant position in the company and their shareholding investors; they garner the companies a chance to collect funds, whereas the investors can gain an equal level of beneficial return by buying shares at the right time. A large number of businesses and individuals Northern Arc Capital is a part of are engaging them. Their first step is the Northern Arc Capital IPO. Taking a thorough overview, you may find yourself a suitable investor.
What is Northern Arc Capital?
Northern Arc Capital is a company that provides loans and also acts as a fund manager. It gives multiple financial services to businesses, individuals, and small companies. Their aim is to help the immense amount of money that is not going to be used in the sectors where usually the money that is left is either not enough or is not being used at all. They use different technologies to your advantage in order to offer the best online lending available. Some of the platforms that they have developed, including Nimbus and nPOS, are technology platforms that are utilised for the purpose of loan management.
Over time, Northern Arc Capital has grown a great deal. They are now servicing many businesses in India. The organisation is exceptional in terms of financial standing with the steady increase of its turnover. In the last financial year, they brought in more than ₹1,900 crore in revenue which has also been a result of their strong profit growth​.
Northern Arc Capital IPO Overview
The news about the IPO comes. The whole amount of money that is being raised by Northern Arc Capital is ₹777 crore. Of these, ₹500 crore comes from a new share issue done by the company, and ₹277 crore is the amount for the shares that existing shareholders are offering​.
The IPO will be open for subscription from September 16, 2024, to September 19, 2024. The share price lies between ₹249 and ₹263 per share​.
For safeguarding your inveÂstment, purchasing at least one seÂt of stocks is recommended. One batch includes 57 shares, thus a minimal investmeÂnt of approximately ₹14,991 is required. These shares will be dual listeÂd on the NSE and BSE​.
Where the raised funds will be invested
If you look at the money being raised by Northern Arc Capital, you will see that there are two main purposes for which it is being raised. The company faces two primary objectives with this issue of new shares:
- Lending More Money: They want to attract more money to lend loans to small businesses, microfinance institutions, housing projects, and even farmers​. This is a big issue in these businesses as they are often unable to get loans from normal banks.
- Meeting Capital Requirements: The Reserve Bank of India (RBI) has certain rules for the amount of money finance companies must have to be allowed to remain in business. The proceeds derived from selling shares through an IPO will help the company Northern Arc fulfil these norms.
Moreover, the IPO will be a great tool for company development as it will be exposed on the stock exchange. This will enable people to familiarize themselves with them and consequently invest in them.
Financial Performance and Growth Prospects
When investing in an IPO, it’s important to check the company’s financials. In the past few years, Northern Arc capital has demonstrated a substantial growth rate. Its turnover has burgeoned about 45% in the previous year. The company recorded more than Rs 317 crores as a profit after tax, which is 31% higher than last year.
The Return on Equity (RoE) was also decent at 13.32%​ Of course, another reason for the high RoE number is that the company has very little debt. The return on equity shows that the company has issued shares (finance from the shareholders) to develop the business to produce the financial result.
Should You Invest in Northern Arc Capital IPO?
Let us start talking about whether you should invest in this IPO. Every IPO has its strengths and weaknesses, and this is no exception.
Strengths
- Strong Growth: Northern Arc Capital has shown consistent growth in revenue and profit over time.
- Diversified Portfolio: The company offers different financial products to both businesses and individuals in India. It is important to note that the company provides a wider range of financial services to not only businesses but also individuals across India.
Weakness
- Smaller Scale: Northern Arc Capital’s size is still smaller than those of large players like Bajaj Finance. Large companies, on the other hand, dominant and usually take up the lion’s share of the marketplace​.
How to Apply for Northern Arc Capital IPO
So, you wish to invest and are after the needed form. Firstly, the process is so simple that you properly request the application form through brokers or your bank with the proper method of which is ASBA. Watch the lectures which have been offered. Through brokerage you can make the application. Some powerful broking firms such as Zerodha and Upstox provide the platform for the users to make an IPO application from their mobile app.
If you possess a UPI account, you can use the same account to subscribe to the shares. The application process requires you to transfer the deposit into your account and it won’t be returned until the shares are allocated.
The shares will be allotted to you on September 20, 2024, after you apply. Should you happen to be the fortunate one to get the shares, they will be listed on the stock market on September 24, 2024​.
Conclusion
This was the complete article on Northern Arc Capital IPO Review. In conclusion, Northern Arc Capital’s IPO opportunity seems promising to those who want to invest in the finance sector. The company has shown a consistent growth in last few years.
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