Northern Arc Capital IPO: Digital Financing for Underserved India

Northern Arc Capital Limited was founded in 2009 and offers retail loans to underserved households and businesses in India.

Northern Arc Capital’s business model is diversified across different offerings, sectors, products, geographies, and borrower categories. As of March 31, 2024, the company has facilitated over ₹1.73 trillion (1.73 lakh crore) worth of financing, reaching out to over 101.82 million (10 crore) people across India.

Objectives of Northern Arc Capital Limited IPO

The company proposes to utilize the Net Proceeds to meet future capital requirements toward onward lending.

Providing Digital Financing Solutions to Underserved India

Northern Arc Capital Limited offers streamlined digital financing solutions through three primary channels: Lending, Placements, and Fund Management. Leveraging our proprietary technology stack, we provide credit access to underserved sectors in India.

Lending: The company provides loans or invests in debt to help partners offer retail loans and directly finances underserved households and businesses. 

• Intermediate Retail Lending: offers finance financial institutions, technology platforms, and business correspondents (Originator Partners) to extend loans to retail borrowers
• Direct to Customer Lending: offers loans directly to underserved households and businesses in the MSME, MFI, consumer, and vehicle finance sectors

Placements: Northern Arc Capital Limited connect investors with opportunities to invest in underserved sectors in India through our technology platform, Nimbus. The company offers structured and syndicate financing for Originator Partners, including credit-enhanced debt and portfolio financing products.

Fund Management: The company’s subsidiary, NAIM, manages debt funds that invest in Originator Partners and mid-market companies. The company have facilitated successful exits for Investor Partners in several AIFs and PMS funds.

Northern Arc Capital IPO Lead Managers

ICICI Securities Ltd, Axis Bank Ltd, and Citigroup Global Markets India Private Ltd are the lead managers overseeing the Northern Arc Capital IPO. Kfin Technologies Ltd is the registrar for the issue.

Revenue of Northern Arc Capital

(In ₹crore)

Key Indicators of Northern Arc Capital

Key Strengths of Northern Arc Capital IPO

These are a few of the strengths of the company:

• The NBFC boasts a growing and diverse pool of Originator Partners and Investment Partners from various industries
• The company’s proprietary Nimbus technology system empowers it to expand commercial opportunities while enhancing productivity
• The NBFC offers a wide range of products and services to borrowers across diverse geographic regions
• With decades of experience, the company has refined its risk management practices to mitigate potential challenges

Key Risks of Northern Arc Capital IPO

These are a few risks associated with the company:

• Disruptions in the NBFC’s funding sources could significantly impact its operations
• The company’s exposure to high-risk borrowers makes it vulnerable to large-scale defaults, which could negatively affect its financials
• The microfinance industry in India is highly regulated, and any unfavorable changes could pose challenges to the business
• The fund management industry may face evolving challenges and competitive pressures in the future