Northern Arc raises INR 229 Cr from Anchor investors ahead of IPO

Non-bank lender Northern Arc Capital raises INR 229 Cr (approximately USD 27.4 Mn) from anchor investors ahead of IPO

Major investors include 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

Founded by Ashish Mehrotra in 2009, Northern Arc provides loans to SMEs, Indian households, financial institutions and emerging companies, including startups. It has backed startups like Rebel Foods, ProsParity, slice, BharatPe and others

Non-bank lending firm Northern Arc Capital has raised INR 229 Cr (approximately USD 27.4 million) from anchor investors ahead of its initial public offering (IPO), which opens for subscriptions on Monday (September 16).

Northern Arc has allotted 87.02 Lakh equity shares to 15 funds at INR 263 per share, which is the upper end of the IPO price band. This brings the total deal size to INR 229 Cr.

Major investors include 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.

The Chennai-based NBFC’s IPO worth Rs 777 Cr will open for public subscription on September 16 and close on September 19, as per RHP’s filing. The price band has been fixed at INR 249-263 per equity share of face value INR 10 Cr.

The IPO is a combination of fresh issue of equity shares worth INR 500 Cr and an offer for sale (OFS) of up to 10,532,320 equity shares worth INR 277 Cr, at the upper end of the price band, by investor-shareholders. This makes the total issue size INR 777 Cr.

The entities offering shares through 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.

The non-bank lender plans to use the funds raised to cover future capital needs in order to continue providing loans.

Founded by Ashish Mehrotra in 2009, Northern Arc provides loans to SMEs, Indian households, financial institutions and emerging companies, including startups. It has backed startups like Rebel Foods, ProsParity, slice, BharatPe and others.

The company claims to have funded over Rs 1.5 trillion across India since inception and has assets under management of over Rs 10,081 billion.

The company’s total revenue for the financial year 2023-24 (FY24) stood at INR 1890 Cr, up 44% from INR 1304 Cr in the previous financial year. The company posted a profit of INR 317.69 Cr for the financial year.

In February, the company filed a draft listing prospectus (DRHP) with the Securities and Exchange Board of India (SEBI).

This development occurred more than two months after Start-up lifted USD 75 million (INR 620 million) in the form of non-convertible debentures (NCD) from the Dutch business development bank FMO.

Earlier in April, NBFC lifted USD 80 million (INR 667 Cr) from International Finance Corporation (IFC), the private investment arm of the World Bank Group, in equal parts equity and debt.