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The Indian stock market witnessed the listing of three mainboard IPOs, namely Northern Arc Capital, Arkade Developers, and Western Carriers (India). While Northern Arc Capital and Arkade Developers opened higher, Western Carriers (India) experienced a flat debut, followed by a decline below its upper price band of ₹172. This suggests that investor sentiment towards Northern Arc Capital is significantly more positive compared to its peers.
Experts attribute the favorable outlook for Northern Arc Capital to its strong fundamentals and robust business model. The company operates in the B2B and B2C lending space, catering to the credit needs of underserved households and businesses in India. This focus on the MSME, microfinance, and consumer finance sectors positions Northern Arc Capital for sustainable growth, according to Prashanth Tapse, Senior Vice President — Research at Mehta Equities.
Furthermore, Northern Arc Capital's differentiated credit underwriting processes and risk models have resulted in exceptional asset quality. Their data repository, comprising over 35.17 million data points, aids in comprehensive credit assessment and monitoring. As per a CRISIL Report, the company boasts one of the lowest GNPA (0.45%) and NNPA (0.08%) rates in FY24. This impressive performance has solidified the company's reputation and further bolsters its attractiveness to investors.
In contrast, experts recommend taking profits in Western Carriers (India) and Arkade Developers. The lackluster performance of these companies on their debut suggests that they may not possess the same fundamental strength and growth potential as Northern Arc Capital. The market's initial reaction to these IPOs indicates a lack of confidence in their long-term prospects.
Overall, the post-listing performance of the three mainboard IPOs highlights the importance of thorough due diligence and a comprehensive assessment of a company's fundamentals before investing. While Northern Arc Capital has captured the attention of investors with its strong business model and impressive financial performance, Western Carriers (India) and Arkade Developers have faced a more challenging reception, indicating a need for greater scrutiny and caution.