Northern Arc Capital gets Sebi's go ahead to float IPO

Non-bank financial institution Northern Arc Capital Ltd has received Sebi's approval to raise funds through an initial share sale, an update with the markets regulator showed on Monday.

The proposed Initial Public Offer (IPO) is a combination of a 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.

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, which filed preliminary IPO papers with Sebi in January, obtained its observation letter on July 12, the update showed.

In Sebi's parlance, obtaining an observation letter means its go ahead to float the public issue.

As per the draft papers, proceeds from the fresh issue would be used to meet future capital requirements of the company towards onward lending.

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.Earlier, 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 proceed with the launch.

Apart from Northern Arc Capital, Shree Tirupati Balajee Agro Trading Company Ltd received Sebi's observations on July 12 to float the IPO. 

The company had filed draft IPO papers with the markets regulator in March.