Northern ARC Capital IPO Listing: Company Lists At 33% Premium To Issue Price

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00:00Northern Arc has also seen a strong debut on the bosses with a near 33% premium to its

00:06issue price.

00:07We spoke to the management that is the MD and CEO, Ashish Mehrotra on the road ahead.

00:12Listen in.

00:13You know, what's really exciting is you tend to think that people who focused on this high

00:19growth sector tend to be niche.

00:22We've demonstrated with the response we got from the large amount of participation is

00:28that a business with consistency of performance and more importantly, commercial viability

00:33and the impact it makes is generally exciting and attracts the center stage of what we do.

00:40We essentially enable the flow of credit to India's underserved household and businesses.

00:46We cater across the seven core sectors, essentially addressing the needs of the retail customers,

00:55whether it's affordable housing, whether it's a small micro loan, whether it's a business

00:59loan, so on and so forth.

01:00And we do it through the multi-channel, i.e. we lend money to the customers and also to

01:06our partners for them to online.

01:10We use that opportunity to create credit solutions for them to raise more money that creates

01:15a sticky fee income for us.

01:17And then we also use our domain expertise and knowledge to invest again in the six to

01:23seven sectors to ensure the seamless flow of credit.

01:26Fair to say a unique company, which is leveraging its domain knowledge, data and digital capabilities

01:34to ensure flow of credit.

01:36We've impacted over about 101 million lives so far, directly, indirectly, and that's the

01:41power of the franchise.

01:42Right.

01:43Great.

01:44So that's, that's everything on Northern Ark in a nutshell.

01:48Let's try and peel that layer by layer.

01:51Let me first start off with growth.

01:54It's a high growth sector for sure.

01:57Industry grows maybe 18% compounded.

02:03You're a smaller, relatively decent-ish size.

02:07Where should it be?

02:09What is your growth expectation?

02:11Maybe in the near term and over the longer term, maybe three, five year view?

02:16I think the way to look at it, one, don't compare us only from the balance sheet.

02:22We play on the three sets on the multi-channel, i.e. we lend.

02:27We provide placement solution, which is equal to the amount of lending we do.

02:31If you compare on an absolute rupee basis.

02:35And then we invest in the funds across in the six sectors.

02:39So our balance sheet has been growing at about 31% over the last three years.

02:43We've demonstrated a very resilient and a high quality performance, both in terms of

02:49the NIMS, in terms of adjusted credit cost and so on and so forth.

02:54And then we use that opportunity to create a sizable amount of fee income.

02:58If our balance sheet is about 11,700 as of March, we would have provided placement solution

03:06of the similar quantum to our originating partners of about 11,700 plus.

03:11And then we would have invested sizable through the fund structure, again in these sectors.

03:16So you have to look at the aggregate value.

03:19And if you look at the aggregate value, it's significantly higher.

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