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Northern Arc Capital made a remarkable entry into the stock market on Tuesday, with shares listing at ₹351 on the BSE, reflecting a 33.46% premium over its issue price of ₹263. Similarly, the stock opened at ₹350 on the NSE, marking a 33.08% premium. Although this debut was impressive, it fell short of the heightened expectations set prior to listing.
Key Highlights of the IPO
The IPO for Northern Arc Capital was open for bidding from September 16 to 19, offering shares within a price band of ₹249-263 and a lot size of 57 shares. The total capital raised amounted to approximately ₹777 crore, which consisted of a fresh share sale worth ₹500 crore and an offer for sale of up to 1.05 crore shares.
Subscription Performance
The IPO witnessed overwhelming demand, with an impressive overall subscription rate of 110.91 times. Here’s a breakdown of the subscriptions:
- Qualified Institutional Buyers (QIBs): An astonishing 240.79 times.
- Non-Institutional Investors: 142.41 times.
- Retail Investors: Subscribed 7.33 times.
- Employee Quota: Subscribed 31.08 times.
Such robust interest highlights the strong market appetite for Northern Arc Capital, showcasing investor confidence in its business model.
About Northern Arc Capital
Founded in 2009, Northern Arc Capital is headquartered in Chennai and focuses on providing retail loans to underserved households and businesses across India. The company’s diverse offerings span various sectors, borrower categories, and geographical regions. As of March 31, 2024, Northern Arc has facilitated financing exceeding ₹1.73 lakh crore, reaching more than 10.18 crore individuals.
Market Sentiment and Future Prospects
While the initial listing premium indicates a positive reception, some analysts expected a higher performance based on the pre-listing excitement, where shares commanded a premium of about ₹130. As the stock begins to stabilize, its future performance will depend on several factors, including overall market conditions, the company’s growth strategies, and its ability to capture a larger share of the lending market.
Conclusion
Northern Arc Capital’s successful debut reflects a growing demand for financial services in India, particularly among underserved demographics. With a solid business foundation and a commitment to expanding its reach, the company is poised for growth. Investors are encouraged to keep a close eye on this stock as it navigates the challenges and opportunities within the dynamic financial sector.
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