Northern Arc Capital Fully Utilises ₹500 Crore IPO Proceeds, With ₹460.49 Crore Deployed Towards Its Lending Business

Northern Arc Capital Limited has fully utilised the ₹500 crore raised through the fresh issue component of its initial public offering (IPO), according to CRISIL's final monitoring report filed with the stock exchanges on 9 November. The company said the proceeds were used for the purposes set out in its prospectus, making this its final monitoring report for the issue.

After accounting for issue expenses, the net proceeds available to the company stood at ₹460.49 crore. The entire amount was allocated towards meeting future capital requirements for onward lending, while the monitoring report showed no unutilised balance at the end of September 2026.

The Northern Arc Capital share price closed at ₹284.10 on 9 November, down 0.18% on the National Stock Exchange (NSE).

How Did Northern Arc Capital Utilise Its IPO Proceeds?

The company's September 2024 IPO had a total issue size of ₹777 crore, comprising a fresh issue of ₹500 crore and an offer for sale (OFS) of ₹277 crore. The fresh issue proceeds were intended to strengthen the company's capital base and support future lending.

The company had used ₹449.85 crore towards onward lending before the September quarter and deployed the remaining ₹10.64 crore during the quarter.

Issue expenses were also accounted for. The revised expense amount was ₹39.52 crore, of which ₹39.41 crore had been utilised earlier and the balance was accounted for during the September quarter.

The net proceeds were revised during the September quarter because actual IPO expenses were lower than the amount estimated in the offer document. The reduction in expenses increased the funds available for the stated lending objective.

Does Northern Arc Capital Expect To Raise More Capital?

A few days before the filing, Managing Director and CEO Ashish Mehrotra had said that the company did not expect to require incremental capital for at least the next 2.5 years, as its existing profit pools should be sufficient to support asset deployment. He added that the company's capital adequacy ratio was close to 21%, which provides room to support growth.

Around 30% of the company's liabilities come from global and domestic multilateral institutions through long-term borrowings. Northern Arc follows a strategy of borrowing for longer periods and lending for shorter durations, which management believes helps it manage interest-rate movements.

The company had also increased its benchmark lending rate by 30 basis points. With around 30% of its loan book available for repricing, Mehrotra said it expected to offset higher funding costs through incremental lending.

In Northern Arc Capital’s Q2 results, consolidated net profit increased 41% year-on-year to ₹129.3 crore, and total income rose 39% to ₹874 crore. Its lending assets under management (AUM) grew 34%.

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