Northern Arc Capital files IPO papers with Sebi; to raise Rs 500 crore

Non-banking financial institution Northern Arc Capital Ltd has filed preliminary papers with capital markets regulator Sebi to raise funds through an initial share-sale.

The Initial Public Offering (IPO) is a combination of fresh issue of equity shares worth Rs 500 crore and an Offer For Sale (OFS) of up to 2.1 crore equity shares by investor shareholders, according to the Draft Red Herring Prospectus (DRHP) filed with Sebi on Friday.

Those offering shares through the OFS include Leapfrog Financial Inclusion India (II) Ltd, Accion Africa-Asia Investment Company, Augusta Investments II Pte Ltd, Eight Roads Investments Mauritius II Ltd, Dvara Trust, and IIFL Special Opportunities Fund.

Northern Arc Capital may consider mobilising up to Rs 100 crore in a pre-IPO round.

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

Registered with the RBI, the company is a non-deposit taking non-banking financial company and has been operating in the financial inclusion space for over a decade.

Northern Arc is a leading player among 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.

Earlier, the Chennai-based 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.

Axis Capital, ICICI Securities, and Citigroup Global Markets India have been appointed as the merchant bankers to advise the company on the IPO.