Northern Arc Capital IPO Full Review | Northern Arc Capital IPO GMP | Apply Or Not??

Summary

The video discusses the IPO of Northern Arc Capital, an Indian financial services platform that caters to small businesses and households. The IPO, open from September 16th to 19th, has seen high demand with over 10 times subscription in the retail category. The company, operational since 2009, has provided over 1.7 billion in loans, impacting over 10 million lives. The script covers the IPO details, including the price band, issue size, and objectives, along with a financial analysis highlighting consistent growth in assets, revenue, and profits. The presenter shares a positive outlook on the IPO, suggesting good listing gains potential, while advising viewers to conduct their own research and make informed decisions.

Takeaways

• 📅 The IPO of Northern Arc Capital is open from September 16th to 19th.
• 📈 The current gray market premium (GMP) is around 75% with an estimated listing gain of up to 1100 per lot.
• 🏢 Northern Arc Capital Limited, started in 2009, is a financial services platform that provides loans to small businesses and households with limited resources.
• 💹 The company operates in multiple sectors including MSME, financing, microfinance, affordable housing finance, and agri finance, having provided over 1.7 billion in loans impacting over 10 billion lives.
• 🌐 The retail category of the IPO is oversubscribed more than 10 times, indicating strong demand.
• 💼 The IPO price band is set between 249 and 263 per share, with a total issue size of 777 crores, including a fresh issue of 500 crores and an offer for sale of 277 crores.
• 📊 The company's assets are growing consistently, indicating the size of the company.
• 📈 The company has shown year-on-year growth in revenue and profit after tax.
• 💲 The company's financials are strong with a profit margin of over 15% and a good net worth.
• 📊 The Debt to Equity ratio is 3.9, which is considered acceptable in this industry, although ideally it should be less than 5.
• 📈 Return on Networth (RONW) is 13.3%, which is considered good but not exceptionally high.
• 💼 The Price to Earnings (PE) ratio is 11.7, which is considered good when compared to other companies in the industry.
• 🔍 The presenter's personal opinion is that the IPO has good chances of listing gains but advises viewers to do their own research and make their own decisions.

Q & A

What is the IPO being discussed in the video?

The video discusses the IPO of Northern Arc Capital, an Indian financial services platform.

What is the timeline for the Northern Arc Capital IPO?

The IPO is open from September 16 to September 19.

What is the current grey market premium for the Northern Arc Capital IPO?

The current grey market premium is around 75, with an estimated listing gain of around 11,000 per lot.

What is the business model of Northern Arc Capital?

Northern Arc Capital is a financial services platform that provides loans to small businesses and households that do not have access to many resources.

In which sectors does Northern Arc Capital operate?

The company operates in multiple sectors including MSME, financing, microfinance, affordable housing finance, and agri-retail finance.

How much loan has Northern Arc Capital provided so far?

Northern Arc Capital has provided over INR 1.7 lakh crore in loans so far.

What is the impact of digital lending in the retail credit industry as mentioned in the video?

Digital lending has played a significant role in transforming the retail credit industry by enabling processes like credit scoring, data analysis, and UPI, leading to rapid growth in the sector.

What is the price band of the Northern Arc Capital IPO?

The price band for the IPO is set between INR 249 and INR 263 per share.

What is the total issue size of the Northern Arc Capital IPO?

The total issue size is INR 777 crore, with a fresh issue of INR 500 crore and an offer for sale of INR 277 crore.

What are the financials of Northern Arc Capital like?

Northern Arc Capital has shown consistent growth in assets, revenue, and profits after tax. The profit after tax was INR 181 crore in FY21, INR 242 crore in FY22, and INR 317 crore in FY24.

What is the opinion of the presenter regarding the IPO subscription?

The presenter's opinion is that there are good chances of listing gains, but the decision to apply should be made by the individual after conducting their own research.