Northern Arc Capital raises Rs 229 Cr from anchor investors pre-IPO

Non-bank financial institution Northern Arc Capital on Friday said it has collected Rs 229 crore from anchor investors, days before the opening of its share-sale for public subscription.

SBI General Insurance Company, SBI Life Insurance Company, Reliance General Insurance Company, Kotak Mahindra Life Insurance Company, Goldman Sachs (Singapore) Pte, Societe Generale, and Quant Mutual Fund are among the anchor investors.

According to a circular uploaded on BSE's website, the company has allotted 87.02 lakh equity shares to 15 funds at Rs 263 apiece, which is also the upper end of the price band. This aggregates the transaction size to Rs 229 crore.

The Rs 777-crore IPO of the Chennai-based company will open for public subscription on September 16 and conclude on September 19. The price has been fixed in the range of Rs 249 to Rs 263 per share.

The IPO is a combination of a fresh issue of equity shares valued at Rs 500 crore and an Offer For Sale (OFS) of up to 10,532,320 equity shares worth Rs 277 crore, at the upper end of the price band, by investor shareholders. This aggregates the issue size to Rs 777 crore.

Those offering shares through the OFS are Leapfrog Financial Inclusion India (II) Ltd, Accion Africa-Asia Investment Company, Eight Roads Investments Mauritius II Ltd, Sumitomo Mitsui Banking Corporation, 360 ONE Special Opportunities Fund (formerly known as IIFL Special Opportunities Fund), and Dvara Trust.

Proceeds from the fresh issue would be used to meet future capital requirements of the company towards onward lending.

"The price band for the offer is at Rs 249 to Rs 263 per equity share," Northern Arc Capital said in a statement.

Investors have the option to bid for a lot size of 57 equity shares and in multiples thereafter.

Registered with the RBI as a systemically important, the company is a non-deposit taking non-banking finance company (NBFC) and has been operating in the financial inclusion space for over a decade.

Northern Arc is a leading player amongst the country's diversified NBFCs, with a business model diversified across offerings, sectors, products, geographies and borrower segments. It provides access to credit to under-served households and businesses directly and indirectly through Originator Partners.

Northern Arc Capital filed draft papers with Sebi in July 2021 to float its maiden public issue. It got the regulator's nod to float the public issue in September same year. However, it didn't go ahead with the launch.

ICICI Securities, Axis Capital and Citigroup Global Markets India are the book-running lead managers to the issue.