Northern Arc GMP Hints At Strong Listing Day Gains After 111 Times IPO Subscription

Investors who booked shares of Northern Arc Capital Ltd. through its initial public offering are likely to make strong listing day gains, as per the grey market premium trends.

The non-banking financial company will mark its debut on the NSE and the BSE on Sept. 24. A day before the listing, the GMP on the stock stood at Rs 141, InvestorGain reported. This indicates that the estimated listing price, which is the sum of GMP and the upper end of the IPO price band, is Rs 404 per share.

If the shares list at Rs 404 apiece, it would mark a premium of 53.6% as against the upper IPO price of Rs 263 per share. However, GMP is not an official price quote for the stock and is based on speculation.

Notably, Northern Ark launched its IPO on Sept. 16, at a price band of Rs 249-263 per share to raise up to Rs 776 crore. This comprised a fresh issue of Rs 500 crore and an offer for sale of 1.05 crore shares worth Rs 276 crore.

The objective of the issue was to augment capital base for meeting future capital requirements towards onward lending.

At the close of the four-day subscription window on Sept. 19, the company recorded an overall subscription of 110.9 times. The investors cumulatively placed bids for 238.2 crore shares as against 2.14 crore shares on offer, as per NSE data.

• Qualified institutional buyers: 240.79 times.

• Non-institutional investors: 142.41 times.

• Retail investors: 31.08 times.

• Reserved for employees: 7.33 times.

The minimum application lot size was 57 shares.

Ahead of the IPO, Northern Arc allotted 87 lakh shares at Rs 263 per share to 15 anchor investors, raising Rs 228.9 crore.

The company's listing comes in the backdrop of the bumper debut recorded by Bajaj Housing Finance Ltd. on the bourses. The property loan issuer listed on Sept. 16 at Rs 150 per share, marking a premium of 114% from the IPO price.