Northern Arc and Sai Life Look To Raise Funds Through IPO: Secures SEBI Green Light Non-banking credit provider Northern Arc Capital and pharma company Sai Life Sciences, both have filed their respective draft papers with the Indian market regulator Securities and Exchange Board of India (SEBI) for a fundraising of a combined INR 7000 Crore.
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Non-banking credit provider Northern Arc Capital and pharma company Sai Life Sciences, both have filed their respective draft papers with the Indian market regulator Securities and Exchange Board of India (SEBI) for a fundraising of a combined INR 7000 Crore.
Northern Arc gets the nod
Chennai-based Northern Arc Capital has got the final SEBI approval for a INR 2,000 Crore issue which will comprise INR 500 Crore fresh issue and the rest in OFS. The company announced that it received final approval from SEBI for a fresh issue and an offer for sale.
According to The New Indian Express, Northern Arc did not disclose its estimated expectations from OFS but TNIC reports that the OFS portion will be close to INR 1500 Crore.
The financial services platform primarily caters to the retail credit needs of underserved demographics. According to its data, the financial institution has facilitated the financing of over INR 1.50 Trillion cumulatively, spread across 682 districts in 28 states and 7 Union Territories in India, and handles Assets Under Management (AUM) of INR 100,811.11 Million.
The firm is funded by equity investors like IFC, Sumitomo Mitsui Banking Corporation, LeapFrog, 360 ONE (formerly IIFL), Accion, Augusta Investments ( Affirma Capital), Dvara Trust, and Eight Roads.
More recently, Northern Arc also announced the issuance of senior secured, listed Non-Convertible Debentures (NCDs) amounting to up to USD 75 Million (INR 620 Crore), taking their overall exposure of USD 125 Million. FMO, the Dutch entrepreneurial development bank, has subscribed to this significant transaction.
Ashish Mehrotra, Managing Director and CEO of Northern Arc Capital remarked that the investment from FMO underscores their commitment to transforming the financial landscape for under-served individuals and businesses in India. "By channeling these funds into microloans, SMEs, and green projects, we aim to create a cascading effect that promotes sustainable economic growth and financial inclusion."
According to Northern Arc, the NCDs will be listed on BSE Limited (BSE) and have a tenure of five years. The funds raised through this issuance will be strategically deployed in retail microloans, MSME loans, and green loans.
Huib-Jan de Ruijter, Chief Investment Officer at FMO, stated, "This local currency facility to Northern Arc, supports entrepreneurship and innovation and encourages the formalization and growth of SMEs and microenterprises. We want to thank Northern Arc for our partnership, enhancing financial inclusiveness across India."
Pharma-player Sai Life to go public
Sai Life, the Khopoli-Raigad-based pharma giant is planning to raise an amount of INR 5000 Crore, which will have INR 800 Crore worth of fresh issuer and the rest will be offered for sale.
The company is a pure-play contract research, development, and manufacturing organization (CRDMO) and works in collaboration with over 280 global pharma and biotech companies to accelerate the discovery, commercialization, and development of new chemical entities and molecule programs according to The New Indian Express.
Sai Life with a track record of over 24 years, has its facilities set up in India, England, the USA, and Japan. The draft red herring prospectus filed with SEBI recently and it is reported that the company's filing does not specify the company's target funds to be achieved through OFS and that the offer will be valued close to INR 4200 Crore. This will also be comprised of selling shares of INR 1 face value of 6.16 Crore equity shares.
The company is said to utilize the proceeds from the IPO towards repayment and prepayment of INR 600 INR worth of outstanding debt and other corporate expenses.
Indian IPO Climate
Mahavir Lunawat, Pantomath Capital Advisors Private Limited, Mid-Market Investment Bank opines that the Indian IPO market has witnessed remarkable growth in recent times and the thriving activity is characterized by a substantial increase in the number of companies seeking to list their shares on the stock exchange, alongside a corresponding rise in capital raised.
"The recently concluded elections are expected to boost the second half of CY25 market activity. Improved market sentiment and a potentially stable economic environment encourage companies to launch their public offerings."
"Additionally, the success of several listings in the first half of CY25 could further drive momentum. While specifics are pending, promising sectors for potential IPOs in the second half of CY25 include consumer staples and discretionary, healthcare, and technology," added Mahavir.
